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Residential real estate owned by an LLC - possible bug in Turbotax Premier

Forum|Forum|4 years ago
February 13, 2022
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I am using Turbotax Premier

I have an LLC which owns residential real estate - I need to properly depreciate the real estate. But under "assets" when I choose real estate only nonresidential real estate is an option! How do I tell the program that this is residential real estate?

Best answer by Compuski1

I have answered my own question. Residential real estate owned by an LLC which is a single-owner LLC and therefore not a separate tax entity is dealt with on Schedule E not Schedule C. In other words, you don't tell Turbotax you have a business (the LLC) rather you tell it you have rental income and then provide the information about the rental, including any expenses of the LLC as expenses of the rental.

It would be nice if Turbotax told us this. I.e,, when attempting to depreciate rental real estate for a business, it would be nice if Turbotax explained that this is not how it is done.

Also, I believe there may be instances where residential real estate could be owned by a single-member LLC and be properly dealt with on Schedule C - and if that is true, Turbotax doesn't let you do it.

ColeenD3

When you first set up the property, after entering the address and giving the property a nickname, you will encounter the screen which asks what type of property it is.

You may need to delete your Schedule E and redo it.

Here's the general procedure for viewing the forms list and deleting unwanted forms, schedules, and worksheets in TurboTax Online:

Open or continue your return in TurboTax.
In the left menu, select Tax Tools and then Tools.
In the pop-up window Tool Center, choose Delete a form.
Select Delete next to the form/schedule/worksheet in the list and follow the instructions.

C

Compuski1AuthorAnswer

I have answered my own question. Residential real estate owned by an LLC which is a single-owner LLC and therefore not a separate tax entity is dealt with on Schedule E not Schedule C. In other words, you don't tell Turbotax you have a business (the LLC) rather you tell it you have rental income and then provide the information about the rental, including any expenses of the LLC as expenses of the rental.

It would be nice if Turbotax told us this. I.e,, when attempting to depreciate rental real estate for a business, it would be nice if Turbotax explained that this is not how it is done.

Also, I believe there may be instances where residential real estate could be owned by a single-member LLC and be properly dealt with on Schedule C - and if that is true, Turbotax doesn't let you do it.