Form 1065 LLC (2 person) real estate that mother lives in

[JudyB]

A previous accountant was doing the 1065 for these clients.

He simply filed a zero tax return.

2 brothers formed a LLC and purchased a home that their mother lives in full time.

1. Shouldn't the capital be stated as the FMV of the home ? 

and

Categorization should be personal, not investment. 

3. K-1 (for each) can show the real estate taxes paid, (no Mortgage) and they can pull that over to their Sc A

Thank you so much for any clarification for me

Judy

[dkh]

Was the only purpose of this LLC to purchase their mother's home ?     Are they collecting rent from the mother ?

[JudyB]

Thank you for responding.

Yes they formed the LLC to purchase the house. Mother does not pay rent

Judy

[dkh]

I'm guessing these brothers did not form the LLC for legal protection in case something happened at this home but rather to be protect their financial investment for when mom is gone.   That would be my guess as to why the prior preparer filed a zero return.     

Does the LLC actually pay the real estate taxes  ?   Can either of the brothers itemize?  

If LLC isn't paying the RE taxes - I'd probably file zero tax return also.   

[JudyB]

Thank you.