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Christopher B, Esq.
Christopher B, Esq., Tax Attorney
Category: Tax
Satisfied Customers: 2922
Experience:  associate attorney
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Taxes

Customer Question

Submitted: 11 months ago.
Category: Tax
Customer: replied 11 months ago.
Hello, I registered for a LLC business along with my partner who lives in Texas with the State of Texas on November 2015. We did not generate any revenue, Do i need to still file for taxes ?
Expert:  Christopher B, Esq. replied 11 months ago.

My name is***** and I will be helping you with your question today. This is for informational purposes only and does not establish an attorney client relationship.

An LLC that is taxed as a partnership (I am assuming this is the case as you have a partner and with 2 members it is assumed by the IRS that this is a partnership unless lectern otherwise) is subject to the same federal income tax return filing requirements as any other partnership. The LLC must file an informational partnership tax return on tax form 1065 unless it did not receive any income during the year AND did not have any expenses that it will claim as deductions or credits. Thus, an LLC with no business activity that is taxed as a partnership is not required to file a partnership tax return unless there are expenses or credits that the LLC wants to claim.

Please let me know if you have any further questions and please positively rate my answer if satisfied. There should be smiley faces or numbers from 1-5 to choose from. This extra step will cost you nothing extra and will ensure that I will be compensated for my time by the site.

Customer: replied 11 months ago.
1. Just to be clear, if we do not file an expenses or credit, we do not need to file a Partnership Tax Return. Please confirm2. In 2016, we started generating income and expenses, but I am planning to withdraw from the Partnership sometime next week, Do i need to worry about any taxes in 2016. Please clarify
Expert:  Christopher B, Esq. replied 11 months ago.

1. You do not need to file.

2. Yes, you should as the flow through would give you income and expenses in 2016. You would need to file.

Customer: replied 11 months ago.
Let me rephrase, i did not personally incur expenses nor planning to take any income. So if i exit the partnership (Basically file an amendment to change the partnership from 50/50 to 100/0 (Basically I will be reduce to 0). In that case, do i need to still file any taxes on behalf of the partnership
Expert:  Christopher B, Esq. replied 11 months ago.

If you take no income or deductions AND your partner takes 100%, then you will not need to file anything, but if you take none but your partner assumes that you will take some, you might have a problem. If not, no need to file.

Expert:  Christopher B, Esq. replied 11 months ago.

Just checking back in, do you have any further questions?