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I have three people that formed an LLC and put a vacation home in the LLC. The home will not be rented out, there will be no income to report. The 1065 instructions state that in order to take the expenses (mtg interest & R/E taxes) as deductions a 1065 partnership return needs to be filed. Partner 1 owns 50% and Partners 2 & 3 (Husband and wife own the other 50%)
Question 1- would you file a 1065 in this situation or just split the Mtg Int and real estate taxes between the partners on their personal returns without filing a 1065?
Question 2 is for anyone that knows New Jersey taxes - If you think a 1065 is needed, is an NJ-1065 needed as well since there are three NJ resident partners. Keeping in mind partners 2 and 3 are husband and wife. Do you think the NJ filing fee applies in this situation?
Thank you for your time, I hope everyone is safe and well.