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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16547
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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A taxpayer established a limited liability company in 2012

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A taxpayer established a limited liability company in 2012 with the state of Texas and has filed the franchise tax return. Although established as a LLC in the state of Texas, there were no revenues or expenses during 2012.

Is a federal tax return required to be filed in 2012 and if so, should it be a partnership (1065) or a subchapter S?

Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

How are you today?

Megan C :

Is the LLC a single member LLC or a multi-member LLC?

Megan C :

If a single member LLC for federal tax purposes the entity is disregarded and the income and expenses are included on the taxpayer's personal tax return

Megan C :

If this is the case, then there's nothing to do because there is no income.

Megan C :

The only way you would file as a subchapter S corporation is if an election was made ... the taxpayer would make that election to be taxed as an S Corp. If that election was not made, then there's no 1120-S to be filed. If that election was made, the taxpayer needs to file an 1120-S even if there's no income or expenses

Megan C :

if they don't there are significant penalties for not filing.

Megan C :

If this is a multi member LLC, that has not made an election to be treated as an S Corp (or C Corp) then they would file form 1065. However, if you review the instructions for form 1065 it states that no return is necessary if there is no income nor any expenses.

Megan C :

You can read this, here: http://www.irs.gov/pub/irs-pdf/i1065.pdf click the link of "who must file" for verification

Megan C :

Do you have any further questions? If not, please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today.

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today. I'm sorry you couldn't view my response. I have copied and pasted it below for your convenience.

 

How are you today?


Is the LLC a single member LLC or a multi-member LLC?

 

If a single member LLC for federal tax purposes the entity is disregarded and the income and expenses are included on the taxpayer's personal tax return


If this is the case, then there's nothing to do because there is no income.

 

The only way you would file as a subchapter S corporation is if an election was made ... the taxpayer would make that election to be taxed as an S Corp. If that election was not made, then there's no 1120-S to be filed. If that election was made, the taxpayer needs to file an 1120-S even if there's no income or expenses


if they don't there are significant penalties for not filing.

 

If this is a multi member LLC, that has not made an election to be treated as an S Corp (or C Corp) then they would file form 1065. However, if you review the instructions for form 1065 it states that no return is necessary if there is no income nor any expenses.


You can read this, here: http://www.irs.gov/pub/irs-pdf/i1065.pdf click the link of "who must file" for verification


Do you have any further questions? If not, please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today.

Megan C and other Tax Specialists are ready to help you
Thanks Lewis for the positive rating and I am sorry for the trouble that we were having in chat mode. Please ask for me again next time you need a tax, social security or finance question answered. It was a pleasure working with you today and I hope you have a great night.

Thanks again
Megan