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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16559
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I an the manager and a member of an LLC. In 2012 the LLC earned

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I an the manager and a member of an LLC. In 2012 the LLC earned $5000.00 from rental property it owns. Does the entire amount have to be declared when reporting this income on the 2012 taxes? If not, what amount should be reported?
It is my understanding that we as members can determine how much of the earned income is distributed to each members based on their shares in the LLC. I ask this question because if all the income earned is distribute to the members, how does the LLC grow monetarily? Can the members determine what percentage of the income should be distribute?
Your assistance is greatly appreciated.

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

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MyVirtualCPA :

The rental income will have to be declared, but the LLC can deduct expenses against that rental income.

MyVirtualCPA :

Also, the members do not have to actually distribute all the funds from the LLC

MyVirtualCPA :

They can determine how much is distributed, but the distribution would be in proportion to ownership percentages

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