LLC Rental Expenses

Forum|Forum|3 years ago
May 13, 2022
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We are partners in an LLC that owns a rental property. We have filed our K-1 income/expenses related to the property, however I have personal expenses (mainly involving mileage/vehicle expenses due to travel). Where can I input those into TT?

I do qualify as a RE professional and materially participate in all activities.

Mike9241

has nothing to do with being a real estate pro. during the interview process for the k-1 you will come to a page that says describe the partnership. then there is a box that says "I am required to pay supplemental........ expenses." check it. then on the next page, there's a question "does your partnership/LLC agreement require you to pay any expenses out of your own pocket" if you answer no you get no deduction for those expenses

According to the Tax Court, unless an agreement between a partnership and a partner states otherwise, a partner cannot deduct expenses on his or her personal tax return if they were incurred on the partnership’s behalf, because it is not “necessary” that a partner pay for them with his own funds. This also holds true regarding LLC members of an LLC taxed as a partnership.

jrschatzAuthor

Thank you -- just so I'm clear, if there are vehicle/travel expenses related to required trips to the property that are not reimbursed by the LLC, and the partnership agreement makes it clear that the partner is responsible for these expenses, these can be deducted? I'm searching other similar questions on the forum and there is mention of taking these deductions on Part II of Schedule E