LLC, 1 rental property and no quarterly statements filed!

[Quad H Properties]

We started a new property management LLC in 2009 but did not buy a property until 2011. This property went into service on March 1 2011.

WE have:

28K in property aquisition

About 15K in improvements (several different ones) we made to the property

650 per month rental income from March on.

Several repairs and depriciatble items.

Loan interest on both the aquisition loan and the imporovement loan (30K and 20K)

All of this probably makes us in the red, but I haven't done the books since the close of 2010 and I really am lost as to how those books should look.

How do I begin to wade through this mess? LOL I have several transactions for each improvement. Do I catagorize these and blend the totals? For instance, I have mold remediation and kitchen upgrades spread out over several invoices. I then have a furnace install over several invoices. Then an internal french drain install over several invoices. Do I gather these up into one "invoice" each? One for the furnace, one for the kitchen upgrades and mold rememdiation (both done by the same contractor I cannot split these up) and one for the french drain? What are the ramifications of having only one "total" figure for these things?

Also, at this point would you just file the 1065 instead of the individual quarterly estimates?

[Quad H Properties]

I got my own answer!! I called the IRS (Yes they ARE a great place for info!) and the rep told me that since our partnership is a passthrough organization, the estimated taxes (if there were going to be any) would be filed with the 1040 ES form. This would be filed with our personal taxes, but BC of our tax bracket, withholdings and our multiple little deductions we most likely will not owe any personal tax. I love my kiddos year round, but I especially love them at tax time!! ;)

[Business Attorney]

Also, at this point would you just file the 1065 instead of the individual quarterly estimates?

As you correctly noted in your second post, an LLC treated as a partnership for Federal tax purposed does not file quarterly estimates or pay taxes. However, filing the Form 1065 is in addition to to the individual estimates, not "instead of the individual quarterly estimates." Although no tax is paid by the LLC (partnership), a return (Form 1065) must be filed.

[Evan]

WE have:
28K in property acquisition
About 15K in improvements (several different ones) we made to the property
650 per month rental income from March on.
Several repairs and depriciatble items.

Loan interest on both the aquisition loan and the imporovement loan (30K and 20K)

You'd capitalize the $28K for the property acquisition.

$650 per month x 9 months = rental income.

Repairs are deductible if they are routine in nature and wouldn't increase the value of the property. Painting would fall into this category. If you did vast repairs, it's possible they should be capitalized and depreciated over its useful life. For example, a new kitchen/appliances, furnace, and other items which are going to be in use for several years should be capitalized and depreciated accordingly.

Loan interest would be deductible in the current year.

If you do not know how these things should be categorized and accounted for, I strongly suggest you use a professional to prepare your return. There are adverse consequences if things get messed up. And the benefit of pass-through income can become a pain if your LLC is audited, and adjustments are then pushed through as any/all partners would need to pay this tax on a personal level (plus penalties/interest).