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Calculating Gross Receipts for LLC

November 01, 2016 • JANICE BOYD • Log In to Post Comments

If an LLC (partnership) is used as a property management company to only collect rents on a commercial building that the 4 individual owners own as tenants in common held outside of the LLC, are those rents included in the calculation for the "gross receipts fee"?  Or would only the management fee that the LLC is charging the owners be reflected in the gross receipts fee?  

Our goal is to use the LLC EIN for reporting rental income received (as opposed to using SSN's) and then LLC will issue 1099's for the gross rents collected to the 4 owners for their own Schedule E on their own tax returns.  The only asset the LLC will own is the bank account.

 

   


Comments

My guess is that the FTB would require the gross rents to be included if they are collecting them. This is likely FTB's interpretation of Total Income under IRC SEc. 61

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