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Ask Merlo Your Own Question
Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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Hi, I am a member in a sole-member llc A (disregarded entity

Customer Question

Hi, I am a member in a sole-member llc "A" (disregarded entity for tax purposes). If llc "A" is a sole member in another llc (LLC "B") (another disregarded entity), what tax forms am i required to file (federal forms)? Also what if llc "A" is a member in another llc (llc "C") that is considered a partnership for tax purposes (multi-member)? What forms are required? Or, what if it is a shareholder in an S corp. what forms are required? please note all forms required by llc A, B, C, and S corp
Submitted: 8 years ago.
Category: Tax
Expert:  Merlo replied 8 years ago.

HelloCustomer

 

The single member LLC's (A&B) are disregarded for purposes of the LLC itself having to file a tax return. As a single member of an LLC, you would report your income and related expenses on Schedule C. If you are a single member of two separate LLC's, and assuming that the two LLC's relate to different types of business, then you would fill out a separate Schedule C for your income and expenses related to each the A and B LLC.

 

If you are also a member of an LLC partnership, the partnership itself would be required to file Form 1065 with the IRS. The partnership would also issue each partner a K-1 form to report all income from the partnership. The partner would then report his income from the K-1 form on the regular 1040 tax return.

 

If you are also a shareholder in an S Corporation, the S Corp would file a federal return on Form 1120S. The S Corp would issue W-2 forms to any shareholder who was paid a salary, and the S Corp would also issue K-1 forms to each shareholder to report all other income from the S Corp. The shareholder would then report the income from the W-2 and the K-1 using the regular 1040 tax return.

 

If this was helpful please press the Accept button. Positive feedback is also appreciated.

 

Thank you.

 

Customer: replied 8 years ago.
so, just to clarify, if llc "a" owns llc "b" then i personally do a schedule c for llc "A" and llc "B" (2 schedule cs)

and if llc "A" is a member in llc "C" then one of the k-1s goes straight to me, or to llc "A"? do i record my percentage of profit in llc "C" on my own 1040 or on llc "A"s schedule C? (sort of the same question for the s-corp)

thanks in advance for your help
Expert:  Merlo replied 8 years ago.

Hello againCustomer

 

If you own both LLC "A" and LLC "B" as a single member, then you would file two separate Schedule C's, and you would report the income and associated expeneses separately on each Schedule C for each LLC "A" and "B".

 

The K-1 forms that are issued by the partnership and the S Corp will go directly to you as an individual, and not to the LLC. The income from those K-1 forms is recorded directly as part of your 1040 form, and is not included on either of the Schedule C's that you file.

 

If this was helpful please press the Accept button. Positive feedback is also appreciated.

 

Thank you.

 

Customer: replied 8 years ago.
hi, just to make absolutely sure, i don't own llc b and llc a. i own llc a, and llc a owns llc b. is it still two seperate schedule c's? same thing is with llc c and s corp. llc a owns both of them. (but with others as well). do i just treat it as if i own all of them separately, and llc a does not own them?