Do You Need to File Taxes for a Rental Property? | How Single-Member LLC Helps | Rental Tax Return

VIDEO TRANSCRIPTION – Do you need to file a tax return if you own a rental property? Hi, I’m Steven D. Cooper, your tax strategist with Coopers Accounting Service, because your financial freedom matters.

If you would like to learn more great tax tips, download a popular financial guide at yourfinancialfreedommatters.com or click on the link below this video.

I was talking to a potential new client that was not aware that she needed to file a tax return. She owns a commercial property. Let me define what a commercial property is. Residential property is a house or units, four units or less. 

If you own a commercial property, it is five units or more or if it’s zoned or classified as a commercial property. I explained to her tax situation. She was a single member LLC.

I told her that from 22 to 25, what we’re going to do is this, we’re going to keep you as a schedule lead for now. 26 going forward, we’re going to move your single member LLC and convert you for tax purposes only as an S corporation. So she’s comfortable with that strategy. 

Next thing that we explained to her, we went over the simple fact thatWe’re not going to incorporate you, we’re going to convert you over. Remember, at CAS, our tax philosophy is this. Asset protection first, tax strategy second. Buyers filing the tax returns as a Schedule E.

She is not going to get penalized for business late filing tax return because it goes on a 1040. And due to other costs, her taxable income is gonna be zero because we can depreciate it. Remember, rental property is the only business where depreciation can take you below zero.

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If you’d like a free 20 minutes smart money consultation, give us a phone call, 562-436-2600. Well again, I’m Steven D. Cooper, your tax strategist with Coopers Accounting Service. 

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