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JimTaxes

Section 179 on Qual. Imp, Commerical rental

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asking here even though i use ProSeries. hope that is ok... asking from a tax standpoint, not a program standpoint

i have a client that has a 1065 LLC

does two things
1. commercial rental
2. farming
is it ok to have both in same LLC
 
so if so.. for 2018 that is what I am trying to do
i put rental on 8852
i put farm on 1065 page 1 etc
 
on the 8852 there is an asset i am claiming 179 deduction
program is limiting  the 179 to the page one of the 1065, profit from the farming
the real estate business has big enough profit to handle the 179
 
should the 179 be limited to the page 1 profit only?

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Not enough information. The key hurdle, you will probably have with this scenario is that for the commercial rental income to be included

is that your client must be "actively participating' in the rental activity, which is a much higher hurdle that material participation and a different definition.

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31 minutes ago, JimTaxes said:

hi.. mutli member LLC.. the rental part is active participation.

 

Can I assume that your client is the Managing Member and that there is no involvement of a Real Estate Broker or a Property Management Company ?

 

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neither mentions for commercial rental having to be active.. new rules. am i reading this right?

 
https://www.pughcpas.com/03/how-the-new-tax-law-affects-rental-real-estate-owners/
 
https://westroofingsystems.com/section-179-tax-deduction-for-commercial-buildings/

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The authority comes from reg 1.179-4(a) which basically refers to the definition of trade or business under section 162.

But of course, trade or business has never been defined by section 162 so we rely on case law.  

In defining a trade or business case law uses terms like regularity, continuous and profit motive.

As cbslee pointed  there is not enough information in your post to give a clear answer. 

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