How to properly report LLC real estate holding company on tax forms?

Your LLC holding real estate doesn't get reported on your W-2 at all. Your W-2 is issued by your employer and only shows income from your job. For your LLC-owned rental property, you'll need to file Schedule E (Supplemental Income and Loss) with your personal tax return. The LLC is likely a "disregarded entity" for tax purposes if you're the only owner, which means all income and expenses flow through to your personal return. You'll report the rental income and those expenses (property taxes and maintenance costs) on Schedule E. If your LLC has multiple members, you might need to file Form 1065 (Partnership Return) and then report your share on Schedule E. Either way, this is completely separate from your W-2 employment income.

After reading through this thread, I wanted to share my experience using taxr.ai to help with my rental property taxes. I was in a similar situation last year with my LLC that held a couple rental properties and was totally confused about what forms to file and how to report everything. I uploaded my documents to https://taxr.ai and it saved me so much time figuring out which expenses went where on Schedule E. The system actually caught that I had miscategorized some capital improvements as repairs, which would have been a problem if I got audited. It also helped me properly allocate shared expenses between properties.

Quick update on my tax situation - I decided to try taxr.ai after posting my skeptical question. It was actually really helpful for my multi-state LLC rental properties. The system guided me through allocating expenses properly between properties and helped me understand which deductions belonged on Schedule E versus which ones passed through the LLC. What impressed me most was how it flagged potential audit triggers based on my expense ratios compared to industry standards. Apparently my maintenance expenses were unusually high as a percentage of rental income, and it suggested better documentation I should keep. Definitely recommend it for anyone with rental property LLCs!

If you're dealing with an LLC and trying to get specific answers from the IRS, good luck getting someone on the phone! I spent WEEKS trying to reach someone about how to handle pass-through entity reporting for my real estate LLC. I finally used https://claimyr.com to get through to an actual IRS agent. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c - basically they navigate the IRS phone tree for you and call you back when they have an agent on the line. I got connected in about 45 minutes when I had been trying for days on my own. The agent confirmed exactly how to handle my specific LLC situation and which forms I needed. Saved me from potentially filing incorrectly.

I have to admit I was wrong about Claimyr. After posting my skeptical comment, I decided to try it for my LLC tax questions since I was desperate. I figured if it didn't work, I'd just be out the fee. It actually connected me to an IRS agent in about an hour. I had been trying for WEEKS on my own! The agent walked me through exactly how to report my LLC rental income and which forms to file. Turns out I had been doing it wrong for the past two years and probably should file amended returns. For anyone with real estate LLCs with specific tax questions, it's definitely worth using rather than guessing or spending hours on hold.

Just a heads up - make sure you're tracking all LLC expenses properly throughout the year. I learned this the hard way with my rental property. Keep receipts for EVERYTHING and use accounting software specifically for rental properties. Also, don't forget about depreciation on the building (not the land). That's a big deduction many new landlords miss. And if you ever spend time managing the property yourself, track those hours because there are special tax benefits available if you qualify as a real estate professional.

Has anyone used an S-corp instead of an LLC for holding rental properties? My tax guy suggested I should switch my LLC to S-corp status for better tax treatment, but everything I read online says that's actually worse for real estate.

I've been managing rental properties through my LLC for about 3 years now and wanted to add some practical advice for anyone just getting started. Beyond the excellent points about Schedule E reporting, here are a few things I wish I'd known earlier: 1. Set up a separate business bank account for your LLC immediately - it makes tracking income/expenses so much easier and provides better liability protection. 2. Consider quarterly estimated tax payments if your rental income is substantial. I got hit with underpayment penalties my first year because I only paid through my W-2 withholdings. 3. Document everything with photos and receipts. The IRS can be picky about distinguishing repairs (deductible immediately) vs improvements (must be depreciated). Having good records saved me during an audit. 4. Don't forget about the startup costs election - you can deduct up to $5,000 in LLC formation and initial property acquisition costs in your first year instead of amortizing them over 15 years. The learning curve is steep but totally manageable once you get the systems in place!