Loaning Personnel Money to LLC (Rental Property)

Forum|Forum|1 year ago
July 28, 2024
2 replies
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This LLC has one rental property. Husband and Wife are member of this LLC. Because of non-payment of rent, I am planning to loan my personnel money to the LLC to cover operating expenses. How do I report this in FORM 1065? Our Operating agreement says that members can loan money to the LLC. Are there documentation that I need to create for this loan?

Not A Product Question

M-MTax

You should document the loan carefully and report the interest the LLC pays you.

narendran-kandasAuthor

Thanks for the response. How to determine the interest rate?

pk12_2

Employee

@narendran-kandas , while agreeing with my colleague @M-MTax on documentation of the loan ( and generally interest charges ), however you may want to consider the benefit vs. complication of interest earnings. Yours being a partnership i.e. a pass through entity ( and a Husband and Wife and state law effects ), you will both show the interest being earned ( taxable ) and interest being paid ( by the LLC )--- ultimately showing up on your own return though K-1.

I strongly believe in KISS ( Keep It Simple Stupid ).

Namaste ji