We are using our personal TurboTax 1040, and noticed something concerning the Schedule E worksheet.
My wife's family owns a warehouse together, and splits ownership by 13 %
I found it odd that the TT worksheet would not allow this percentage to be applied for these entries:
Auto - line 6a Depreciation - line 20a
Your wife's family has a "partnership" for tax purposes, and the resulting rental income and expenses should be reported to each partner in their distributive share on a K-1 after filing the form 1065 Partnership Return. A partnership is created by facts and circumstances, and not necessarily by overt Partnership formation. Get a Federal EIN for the entity and see a Tax pro about the 1065.
They do not necessarily have a partnership. If they simply own and rent out the warehouse without providing any substantial services, it is Schedule E rental income that may be proportionately split among the owners. If they provide substantial services or it is part of a business, then they probably have a partnership.
No comment on the TT question since I do not use TT. You can always allocate manually however.
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