Anonymous asked in Business & FinanceTaxesUnited States · 3 weeks ago

Tax question ?

I own a rental property with a sibling under an LLC. My sibling who is 1099 only takes the deductions on the rental income

Myself and wife and both w2 but never showing any earnings on my end as he filed taxes on the property. I’m wondering if I’m losing out by not doing so. I understand if I take standard deduction I cannot claim expenses in nyc. Some insight as I’m feeling he may be benefitting on his tax rates vs me by not claiming as earned income. 


**My wife and I both work and receive w2. The sibling owns his own business 

Update 2:

i did not explain this correctly. sorry

5 Answers

  • Eva
    Lv 7
    3 weeks ago

    WTF. You nor your sibling know NOTHING about the taxation of a multi-member LLC. A multi member LLC must file a partnership return and each partner receives a K-1 with their share of the net income (or loss) from the LLC. The LLC could have chosen to be taxed as a S-Corp, but there again there would be K-1s issued as well as W2s to the corporate officers. Make an appointment with an accountant and take your LLC papers with you so they can explain to you how this is supposed to be done. As a multi member LLC your sibling cannot simply report all of it on his tax return,

  • 3 weeks ago

    You BOTH need to consult a CPA or tax attorney. What you describe here is NOT properly handling the LLC OR your personal taxes.

  • 3 weeks ago

    Why are any of you getting W2s from your rental property?

    Hire an accountant, this is very screwed up.

  • Anonymous
    3 weeks ago

    You're doing it wrong.

    You should be declaring whatever rental income YOU receive. And you can deduct whatever expenses YOU paid for from that income. This is done on Schedule E and has nothing to do with your standard deduction or whether your other income is W-2 or self-employment.

    If he is deducting expenses that you paid for, he's filed a fraudulent tax return. And if he's deducting expenses related to the rental property on Schedule A (itemized deductions), that's not right either.

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  • Anonymous
    3 weeks ago

    He can only deduct what he spent for his half.

    Both of you should be filing schedule e with your 1040. .

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