Just a heads up about something many new partnerships miss - don't forget to include your guaranteed payments if you took any regular draws from the business! Those aren't the same as distributions and get reported differently on the K-1.

I went through a very similar situation with my consulting partnership last year when our CPA bailed on us right before the deadline. Here's what I learned that might help you: For your straightforward 50/50 partnership with $34k income and $8.5k expenses, you can absolutely handle this yourself. The key things to remember: 1. Your quarterly distributions of $3,125 each are NOT reported as income on the K-1 - they're just distributions of money you already earned. The actual income that goes on each K-1 would be your share of the net profit (roughly $12,750 each after expenses). 2. Make sure you track your "basis" correctly - this starts with what you each contributed to start the LLC, then increases with your share of income and decreases with distributions taken. 3. For a simple partnership like yours, the main boxes on the K-1 that will have amounts are Box 1 (ordinary business income) and possibly Box 19 (distributions). I used FreeTaxUSA's business version for about $80 and it walked me through everything step by step. The 1065 generates the K-1s automatically once you input all the partnership info. Took me about 3 hours total, and my regular accountant said they looked perfect. Don't stress too much - your situation is pretty straightforward compared to partnerships with multiple income streams or complex allocations!

I went through this same confusion when I started my rental property journey! One thing that really helped me understand the "placed in service" concept was realizing it's all about when the property becomes available for its intended rental use, not when you actually start earning income from it. In your case with tenants moving in June 1st, that might actually be your placed in service date IF that's when the property was first ready and available for rent. But if you had finished repairs and could have rented it earlier but just didn't find tenants until then, your placed in service date would be earlier. Here's what I learned about those pre-tenant expenses you mentioned: - Advertising costs to find tenants are typically deductible rental expenses - Repairs to get the property rent-ready are usually deductible - New appliances that add value may need to be depreciated rather than expensed immediately The key is documenting everything with dates - when repairs were completed, when you started advertising, when the property was actually ready for occupancy. I took photos of my property when it was rent-ready as evidence for my records. Since this is your first rental, I'd really recommend getting professional help for at least your first year's taxes. A CPA who specializes in rental properties can help you set up proper record-keeping systems and make sure you're classifying everything correctly from the start. It's an investment that pays off in properly maximized deductions and avoiding future headaches with the IRS.

I completely understand your confusion about the placed in service date - it's one of those tax concepts that seems straightforward until you actually try to apply it! As others have mentioned, the key is that it's when your property becomes ready and available for rent, not necessarily when tenants move in. For your situation, you'll need to determine exactly when your property was in a condition where it could legally be rented out. If you were still doing essential repairs or renovations that prevented tenants from moving in before June 1st, then June 1st would likely be your placed in service date. But if the property was actually ready earlier and you were just looking for the right tenants, then your placed in service date would be earlier. Here's my practical advice for sorting through your expenses: - Keep all receipts organized by date and type of expense - Repairs needed to make the property rentable are typically deductible - New appliances and major improvements usually need to be added to your basis and depreciated - Advertising costs are generally deductible rental expenses Since this is your first rental property, I'd strongly recommend consulting with a tax professional who has experience with rental properties, at least for this first year. They can help you properly classify your expenses and set up good record-keeping practices that will serve you well in future years. The investment in professional guidance upfront can save you from costly mistakes and ensure you're maximizing your legitimate deductions. Don't stress too much - with proper documentation and maybe some professional help, you'll get through this!

I've been struggling with this exact same issue for over a month now! Reading through all these responses, I think I've been making the classic mistake of overthinking it. I've tried probably 20 different variations of my address format, but I never thought to check what the IRS actually has on file for me in their system. What really resonates with me is the suggestion about using old IRS correspondence as a reference - I definitely have some notices from last year that I can dig up. I've also been trying during my lunch break like a lot of people probably do, so the off-peak hours approach makes total sense. The most frustrating part is that generic "invalid address" error message that tells you absolutely nothing about what's actually wrong. It could be a missing comma, wrong abbreviation, or their servers just having a bad day. I appreciate everyone sharing their specific solutions because the IRS website's help section is basically useless for troubleshooting this stuff. Going to try the all-caps approach combined with the exact format from my last IRS mailing tonight when fewer people are using the system. Fingers crossed! 🤞

I'm dealing with this exact same frustrating issue right now! After reading through everyone's experiences, it's clear the IRS address validation system is just poorly designed. What strikes me most is how many different "solutions" people have found - from all-caps formatting to removing punctuation to trying old IRS correspondence as a reference. I think the key takeaway here is that their system doesn't match addresses the way a normal person would expect. It's not just checking if your address exists, but whether it matches their very specific internal formatting rules that seem to change randomly. I'm going to try the combination approach: find my last IRS notice, copy that address format exactly (including capitalization and spacing), clear my browser cache completely, and attempt access during off-peak hours. If that doesn't work, I'll request the transcript by mail and use that to see exactly how they have my address formatted in their system. Thanks to everyone who shared their specific solutions - it's way more helpful than the generic "contact the IRS" advice you get from their official help pages!

Quick tip - if you're filing an amended return, make sure you pay any additional tax owed as soon as possible even if the amended return takes months to process. The IRS charges interest on unpaid taxes from the original due date (usually April 15th), not from when they process your amendment. This caught me off guard when I had to amend last year. I waited until my amendment was processed to pay, and ended up with interest charges I wasn't expecting!

I went through this exact same situation two years ago! Forgot a W-2 from a part-time job that was only about $280. I was terrified about penalties but here's what I learned: The IRS is actually pretty understanding when you voluntarily amend before they catch the mistake. I used TurboTax's amendment feature and it walked me through everything step by step. The hardest part was honestly just printing and mailing the 1040X since you can't e-file amendments. One thing that helped calm my nerves was calling the IRS practitioner priority line (if you have a CPA or enrolled agent help you) or using one of those callback services others mentioned. Getting confirmation that my amendment was received properly gave me so much peace of mind. The whole process took about 4 months to fully resolve, but no penalties since I was proactive about it. Don't let the anxiety eat at you - just get the amendment filed and you'll be fine!

Don't forget about state tax issues! Depending on your state, you might have franchise tax or entity-level taxes that are affected by the change from partnership to single-member LLC. In California for example, the $800 minimum franchise tax applies differently to partnerships vs. disregarded entities. Also, if you have any registered intellectual property like trademarks or patents in the LLC's name, you'll want to document that these remain with the entity through the transition. Some states also require notification to any LLC registered agents when ownership changes by more than a certain percentage.

Michigan has pretty straightforward requirements for LLC ownership changes. You'll need to file an amendment to your Articles of Organization with the state if your operating agreement requires it, but many standard LLCs don't actually require this filing just for membership changes. For taxes, Michigan follows federal treatment pretty closely - your LLC will be disregarded for state tax purposes once you become the sole member, so you'll report business income on your individual Michigan return instead of filing a separate entity return. No special franchise tax issues like California. One thing specific to Michigan - if you have any state tax credits or incentives tied to the LLC (like Renaissance Zone benefits or certain business development programs), make sure those don't get affected by the ownership change. The Michigan Department of Treasury sometimes requires notification for significant ownership changes in entities receiving state benefits. Also document your digital assets and domain ownership clearly in your buyout agreement. Even though they're not "registered IP" yet, having a clear record of what stays with the LLC will save headaches later if you do end up filing for patents or trademarks on your software.