How to reflect in K-1 and in Form 8582, losses from a rental that was transferred to LLC

Forum|Forum|11 months ago
April 11, 2025
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A rental property was transferred to a 100% owned LLC 1/1/2024. The rental had unallowed losses in prior years on Form 8582 line 1C. How do I reflect these in the K-1? In my personal form 8582, do I just add to the existing number prior to the transfer? Thanks in advance

Mike9241

are you saying the property was distributed from a partnership to your single-member LLC? if so, I suggest seeing a tax pro because in certain situations, gain must be recognized that isn't on the k-1

on the other hand if you own 100% of the property and then put it into an LLC - a 100% owned (single-member LLC) does not file its own tax return. It's a disregarded entity, so you continue to use schedule E.

CmoraAuthor

The rental is owned by my husband and myself. We own the LLC so I was expecting no impact at transfer. There are K-1s because our children own 5% of the LLC. Should I override the balance it calculates? Thank you for your help!

PatriciaV

If you own an LLC with anyone other than your spouse, the LLC is considered a partnership and must file a separate tax return. As Mike9241 mentioned, you may wish to contact a local tax professional to assist with filing the business return (which was due March 15) and reporting the transfer of the property.

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