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PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4024
Experience:  35 years tax experience, including four years at a Big 4 firm.
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2 years ago I changed the taxing structure of my two single

Customer Question

2 years ago I changed the taxing structure of my two single member LLC's to a partnership. Currently these two partnerships are members of another partnership. How would I change the taxing structure back to fall through entities to simplify my tax returns? They are now single member LLC's again. The form 8832 states that I cannot change back within 60 days. Do I just add a cover letter explaining that the LLC's are no longer two member LLC's?
Submitted: 6 months ago.
Category: Tax
Expert:  PDtax replied 6 months ago.
Hi from Just Answer. I'mCustomer I'll assist. Onc the LLC's become single member entities again, their tax year terminates as of that date. You file a short period tax return, and that tells IRS of the change in status. Then, for the rest of the year and the future, report them as SMLLC's (single member LLC's) as disregarded entities (Schedule C) or other forms as you elect. You don't need the 8332 to change, as they automatically change from partnerships to SMLLC's. Thanks for asking at Just Answer. Positive feedback when you accept my assistance is appreciated. I'mCustomer
Customer: replied 6 months ago.
Is the short period tax return a special form? I don't see that option in TurboTax.
Customer: replied 6 months ago.
Also I live in a communal property state, it seems the IRS states that we can be treated as a single member LLC. Should I include a letter
Expert:  PDtax replied 6 months ago.
No special form is needed. Just use the dates lines to set the short period.No need to include a letter if you rely on the change of ownership you described.Please rate my assistance to close out your inquiry. I'mCustomer
Customer: replied 6 months ago.
I really don't understand what it is I should do.
Customer: replied 6 months ago.
Are you saying that I should just report the LLC on the 1040 as a single member entity?
Expert:  PDtax replied 6 months ago.
I'm saying your LLC has two years to report. The short period when it was owned by multiple members (1/1-6/30, for example) is likely filed on a 1065. The remainder of the year, let's say 7/1-12/31), when you owned 100%, is reported on schedule C as a disregarded entity.