John Schumer operates three entities that he owns 1000% in the Providence, RI area. There are two limited liability companies (LLCs) and one S corporation. Each of the LLCs holds rental real estate. LLC 1 holds a six-story, multi-unit building. The minimum tenant stay there is 31 days. And there are mandatory housekeeping serviced provided on a bi-weekly basis. LLC 2 holds a single-family home rented on an annual basis. Both LLC's pay the S corporation a managment fee. John is the sole employee of the S corporation, from which he take a full-time salary for managing the two LLCs, where he materially participates. He is an architect. However, all his time spoent running th three businesses. He no longer performs architectural services.

1) Is the rental activities income subject to the self-employment tax?

2) Finally, how can we streamline the recordkeeping for the three entities?

Answer rating: 100% (QA)

Answer 1 Unlike wages from a job or a business you participate in rental income isnt considered to b... View the full answer