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I entered equipment on an LLC 1065 which was purchased

during start up in 2017...
I entered equipment on an LLC 1065 which was purchased during start up in 2017. Will I enter any property listed in the LLC 1065 on my personal return in the partnership section? Such as the deductions for using personal vehicles for business purposes or do I leave all equipment and capital out of my personal write off for partnership section.
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3/10/2018
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
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Experience: 35 years tax experience, including four years at a Big 4 firm.
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The 1065 LLC filing is for a partnership. You will report all the depreciation at the LLC level, then it is allocated amoung the partners per agreement.

You do not personally depreciate anything. Use the K-1 from the LLC to report everything personally.

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Customer reply replied 4 months ago
ok great. Just so I understand correctly. All assets I entered in the 1065 was for figuring my K1 income. Therefore all assets depreciated in the LLC on the 1065 stays there and will not be entered again on my personal 1040 LLC section because I am counting those assets in calculating my equity and therefore my income portion of the LLC profit / loss on the K1?Then any assets or purchases not included on the 1065 can go on my personal 1040, correct?I included all my startup costs on the 1065 as well. I would imagine I will not add that in to my 1040 either?
Customer reply replied 4 months ago
just a little more info, I purchased all the equipment myself during start up. I added all the equipment as depreciable items and counted that as capital for the LLC and ended with a capital balance on the 1065.

You could retain any assets you want outside of the LLC. Doing so creates a problem. You aren't in the business of the LLC, and would have no offsetting income. I have seen people report the depreciation you suggest personally for assets as if they were LLC assets, reported as a second K-1 loss item, but I prefer something more concrete.

If you must keep some assets out, then you should have a lease with your LLC so that you are paid for the asset usage, and thus could claim the rental income and depreciation personally. The LLC gets a rent deduction for the rent so reported, so the net is the same. But you are renting equipment in this case, which has a business purpose.

PDtax

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Customer reply replied 4 months ago
Can I rephrase this a little? Thank you in advance for reading through before responding.I bought equipment from personal funds and entered this into the LLC 1065 as assets and are depreciated. Everything was bought during startup of LLC in 2017 4/28/2017. LLC officially formed 9/9/2017. By entering these assets into the 1065 I have equity in the LLC according to the capital balance. The K-1 I then created is a schedule of profit and loss based on contribution to the LLC and it's earnings / losses which gives me a number (profit / loss) that I enter as income for my federal 1040. This is how I understand it.In turbotax 1040, I am asked about assets I contributed to the LLC and for deductions and everything I actually entered into the 1065 including startup costs. All of which I bore the costs 50-50 with the other partner (wife is only other partner and filing joint).Now the question I am asking is this: Would I add all that information into my 1040 the same as I entered into the 1065 because it is asking about it? Why would I be asked the same questions on my 1040 as the 1065 did? Is this because a single owner LLC (disregarded entity) would enter that on the 1040 instead of a 1065 w/o a k-1? If that is correct then I would ONLY add my K-1 info and some non LLC issues such as personal auto used for business deductions and items that were not reimbursed directly (or have equity basis).
Customer reply replied 4 months ago
This probably would not even be a question except that I was the preparer of the 1065 and for my 1040 at the same time being bearer of all the costs! Now I see places to put all the same information on two different forms and it seems I should be disregarding that info on my 1040 because it is on the 1065.

You should disregard the 1040 asset questions that are duplicated when you contributed them to the LLC. I agree with you.

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PDtax

PDtax
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