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April 8, 2023
Question

Transitioning multiple properties on same land into one for taxes

  • April 8, 2023
  • 1 reply
  • 0 views

Hello. I'm working on my 2022 taxes. I have a (maybe?) complicated situation and I'm looking for some help. For the past few years (say 5), I've owned a property which has House A and Apartment B on the property. I've been renting out Apartment B as 100% rental property and tracking expenses to that throughout, prorating expenses that would be shared between A and B accordingly. I've been reporting Apartment B as a line item on TT; it has its own depreciation schedule, etc.

 

House A has been my primary residence throughout that time until very recently, when I moved. Before I moved, I was 1. renting out part of my house when I was also living there and 2. sometimes renting out the whole house when I was working elsewhere. I've calculated the personal vs business percentages accordingly to allocate to my expenses for House A. It also is a separate line item on TT with its own depreciation schedule.

 

My intent now is to rent out both House A and Apartment B 100% of the time, and they are both now within an LLC. I did not form the LLC until recently (late 2022). I know the LLC is a passthrough, and I am struggling to merge the 2 separate line items for rental property for A and B into one to reflect it as one item in TT. 

 

Question is: Do I need to merge A and B into one line item in TT since they are both under the same LLC? Pros/cons? What should I be looking for to do that successfully?

 

Thank you very much!

    1 reply

    KrisD15
    April 8, 2023

    To clarify, are you reporting the income on Schedule E or Schedule C? 

     

    (Is it passive rental income or a business?) 

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    pyropinupAuthor
    April 8, 2023

    Well, until 2021 was reporting on Schedule E. Now, i'm not sure if I should stay on Schedule E or switch to C, and if I should, how to do that... My plan in 2023 is to operate both A and B under one LLC, again allocating expenses accordingly when needed.