I own some rental properties through my LLC. While most of the expenses can be attributed to a property and find their way to schedule E, I'm puzzled about the LLC expenses... In California its significant as we have the notorious "LLC fee", which is kindof a tax, but not really a tax, though paid as a tax to the tax board...
How would I report it on my taxes? Should I split the LLC expenses amongst the properties on schedule E equally and just write it down as an expense for the properties, or should I separate them to schedule C?
The reason I'm worried is because I'm a bit reluctant having schedule C with loss every year, I'm afraid it would be an audit trigger, and I'll have some explaining to do (not that I'm not entitled for the deduction, but just the hassle...). Does it make any sense at all, or should I just stop worrying and have a loss on my schedule C and all the LLC income (which is rental income) reported on schedule E?
The whole purpose of the LLC is to own the properties (I've been asking about it a while ago here), so there's not going to be any income to report on schedule C ever.
To clarify, the "notorious LLC fee" is the $800 assessment under R&TC 17941, in addition the LLC's are charged income tax based on their income, but that's not an issue for me because my income is not attributed to California, the rentals are in a different state. Details here.