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How should I report income received from rental real estate?

How should I report income received from rental real estate?
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Nathen Astle   wrote on : Tue May 25th,2010   Back to Article

After a few days of research need to ask the question -- I have a new client that formed a LLC in Nevada on 12/15/2008. The only transactions they had were start up costs of $2464.67. The LLC is going to have rentals as the source of income. Properties were purchased but none of the closings happened until after 1/1/09. They want to amortize the start up costs which means their K-1's will show an expense of negative 4 for each of them. My question is should they file 1040NR's or not? After I see a few answers I am going to ask NATP the research question.

Reply :

Technically you can not make basis of the deals which is not yet closed or matured. You can only claim expenses what are not associated with your property. For instance office rent, telephone charges etc.

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