My client co owns property, in an LLC with outside co-owners. They received a 1099 for the entire rent received in the LLC's name and tax ID. what should they do?

[hamida_surti]

The 1099 amount is only partially belongs to the LLC. I have put down the percentage the LLC owns, in form 8825. Is that enough to satisfy the IRS matching process? Do I need to do something more so that the entire burden of the rental income does not fall on the LLC? Please help?

[George4Tacks]

So one property with LLC and another without? https://proconnect.intuit.com/community/proconnect-tax-discussions/discussion/coownership-of-rental-...

[BobKamman]

Are they filing a partnership or corporation return for the LLC, or just planning on putting it on their Schedule E?

[hamida_surti]

They are filling a partnership return for the LLC as there are two partners in the LLC and some outside investers

[George4Tacks]

I would report 100% of the rental income and take an expense for Nominee share.

You should also file a 1099 for the rents to this nominee. 

?? Work with the entity issuing the 1099 to file two 1099s in the future. ?? 

Would it be correct that the LLC does not own 100% of the property?

[BobKamman]

So, there is one property, but the deed says "Bob-Carol LLC as to some percentage, and Ted and Carol Smith as to some percentage."  And when the tenant asked the LLC couple for a W-9, they were so proud of the LLC that the guy at the seminar had told them to set up, that they gave them just the one number?  So what did they expect?  Technically, they should now give the other owners a 1099 for their share of the rent.  But the next best solution is to report all the rent on the 1065, then deduct the payments to co-owners as, let's see, I would call it "payments to co-owners."

[hamida_surti]

In the past the property was reported as 50% on form 8825. There was no 1099 issued, so there was no problem. The 1099 was issued by the government for rent abatement during covid and the property manager took it all to the LLC

Dont know how to handle

[hamida_surti]

no the LLC does not own 100% of the property in question. The 1099 received was rent abatement payment from the county. In the past the property was reported as 50% on form 1065.