JimTaxes Posted January 5, 2019 Report Posted January 5, 2019 asking here even though i use ProSeries. hope that is ok... asking from a tax standpoint, not a program standpoint i have a client that has a 1065 LLC does two things 1. commercial rental 2. farming is it ok to have both in same LLC so if so.. for 2018 that is what I am trying to do i put rental on 8852 i put farm on 1065 page 1 etc on the 8852 there is an asset i am claiming 179 deduction program is limiting the 179 to the page one of the 1065, profit from the farming the real estate business has big enough profit to handle the 179 should the 179 be limited to the page 1 profit only? Quote
Lee B Posted January 6, 2019 Report Posted January 6, 2019 Not enough information. The key hurdle, you will probably have with this scenario is that for the commercial rental income to be included is that your client must be "actively participating' in the rental activity, which is a much higher hurdle that material participation and a different definition. Quote
Terry D EA Posted January 6, 2019 Report Posted January 6, 2019 Agree with cbslee, which activity is the LLC? Is the LLC a single member and taxed as a disregarded entity? Quote
JimTaxes Posted January 7, 2019 Author Report Posted January 7, 2019 hi.. mutli member LLC.. the rental part is active participation. Quote
Lee B Posted January 7, 2019 Report Posted January 7, 2019 31 minutes ago, JimTaxes said: hi.. mutli member LLC.. the rental part is active participation. Can I assume that your client is the Managing Member and that there is no involvement of a Real Estate Broker or a Property Management Company ? Quote
JimTaxes Posted January 7, 2019 Author Report Posted January 7, 2019 neither mentions for commercial rental having to be active.. new rules. am i reading this right? https://www.pughcpas.com/03/how-the-new-tax-law-affects-rental-real-estate-owners/ https://westroofingsystems.com/section-179-tax-deduction-for-commercial-buildings/ Quote
DANRVAN Posted January 8, 2019 Report Posted January 8, 2019 The authority comes from reg 1.179-4(a) which basically refers to the definition of trade or business under section 162. But of course, trade or business has never been defined by section 162 so we rely on case law. In defining a trade or business case law uses terms like regularity, continuous and profit motive. As cbslee pointed there is not enough information in your post to give a clear answer. Quote
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.