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Level 1
April 2, 2021
Question

Deducting expenses related to income from partnership guaranteed payments for capital

  • April 2, 2021
  • 1 reply
  • 16 views

The taxpayer rents property to his majority owned partnership.  This rental income is reported on line 4c of the K-1.  This amount flows to page 2 of the Schedule E, not to a rental property worksheet.

Where does the taxpayer report the deduction for rental property expenses (depreciation, real estate taxes, insurance, etc.)?

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1 reply

abctax55
Level 15
April 2, 2021

There are so many things wrong I don't know where to start.  I suggest seeking professional guidance.

The "partnership" would pay the individual rent.  So the K-1 shouldn't show "rental income", it would show rental expense paid to the individual.

And pay attention to the self-rental rules.

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