I bought my first rental property last year and started an LLC for tax and liability benefits. However, I didn't transfer the title into the LLC's name, I bought it outright in my own name. The bank account is in the LLC's name with it's EIN. I plan on transferring title to the business soon. My question is, do I need to worry about taking income from the LLC bank account? I haven't touched the rents that have come in because I wanted to make sure I did it correctly for tax reasons so everything has been separate from my personal money.
Could someone please advise?
asked 09 Apr '12, 11:06
Whether you report the rental income through the LLC or on your individual return should result in the same amount of tax. So the government should not be concerned with which form that it is reported on. Also, the government is generally not concerned with the nuances of title. So I would follow the money -- wherever the rental income was deposited -- that is where I would report it. If the income was deposited into the LLC's bank account, then report it on the LLC's tax return.
answered 18 Apr '12, 17:02