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sajid110 · Apr 11, 2017, 06:25 PM

Hello,

I opened a company (real estate buy n flip) in 2016 with some other partners. We invested money and bought a property. However as of dec 31, it was not sold. We sold it a month ago. My question is - on my personal tax return which is normal W2, do I have to report anything about the company? If not do I have to file any tax related item with IRS even though we didn't make any money last year? The company is based in Texas.

Thanks for your help.

AtlantaTaxExpert · Apr 11, 2017, 07:13 PM

You are filing on a CASH basis, so you deduct all of the expenses on the partnership, and those losses "passes through" the partnership to the partners via the Schedule K-1.

The income on the sale of the property will be reflected on the 2017 partnership return.

sajid110 · Apr 11, 2017, 10:08 PM

Thank you AtlantaTaxExpert.I understand the part where we need to file company taxes next year since we made income this year.however for this year, I'm a little confused. When I file my 1040 (for my regular w2) for 2016, do I need to indicate that I had a company in 2016 even though I only invested money in it and did not make any income? If so, how do I do it?Thanks.

AtlantaTaxExpert · Apr 11, 2017, 10:45 PM

The fact that you are a partner in a company will be shown on Page 2 of Schedule E. That form is generated as a result of the data from the Schedule K-1 from the partnership.