I am thinking that the problem is that they chose to have the LLC taxed as a partnership and that one partnership return has been filed.  Without that, It would have been a single member LLC so a disregrded entity and not an issue. They converted their primary residence to a rental 12/01/20 and held it personally until the end of October, 2021 when they transferred it to the LLC.  Maybe it would be worth trying to change it's classification from a partnership using form 8832 and hoping it would be accepted for late election relief under the circumstances.  What do you think about that idea?