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Hi everyone,

I was sent over here from the "owning rental property" board.

I created an LLC this year and bought a single rental property within it (2005). I'm accounting for the LLC as a sole proprietorship. I understand to account for rental income, related expenses, depreciation, etc on schedule 'E'. However, there are some items that I'm not sure how to handle.

For example, I had entered a contract to purchase a property and "sold" that contract to someone else who actually bought the property. So, in that case I made a profit but not by renting at all.

I also had expenses like paying to take a real estate investment course and to start the LLC. These aren't expenses that are really tied to a single property.

These items "feel" like they are part of owning a business rather than part of rental income.

Can someone give me a start on how to account for these items?

Much Thanks,
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I created an LLC this year....

So, what does your accountant say?

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Hi Doug,

My accountant said to report as a sole proprietorship when I set up the LLC. I spoke to him a couple of weeks ago to ask a couple of questions. He suggested that I meet with him to do my taxes. I'm a bit of a nerd (a software guy with a couple of MBA courses behind me - perhaps just enough to be dangerous) and really like to understand stuff like this. So, I suggested that I take a crack at doing my taxes and then would send him what I did for review and would meet with him after that as needed. Maybe this is not the typical approach but I think I will learn better. I'd also like to avoid having to take time off of my day job to work though this if possible.

Anyway, I did ask him this question via e-mail but he has not replied. Perhaps he doesn't think I will follow through with the review? I thought I'd give this board a try. The Hidden Gems boards are so good.

So that's the full disclosure. Thanks for any direction any of you can provide.

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