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Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 2660
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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I formed a California single-member LLC with pass-through

Customer Question

I formed a California single-member LLC with pass-through taxation (disregarded entity) in 2015. I am a consultant. I am completing my tax returns with the LLC for the first year (2015) and am trying to complete form 568. At the moment, I believe I have worked through most of the Yes/No questions. However, I am not sure what to do about questions M (1) on Side 2 of the form and U (3) also on Side 2 of the form.M (1) asks "Is this LLC apportioning or allocating income to California using Schedule R?"U (3) asks "does the disregarded entity have total income derived from or attributable to California that is less than
the LLC’s total income from all sources?"I am not sure what to make of the verbiage of "apportioning or allocating ... to California" and "attributable to California" in these contexts. My business is located in California, and the income it derived last year was entirely from a contract with a company located in another state. I performed 90% of the work here at home in California and the remaining 10% of the work at the client site during trips to their office. I have no idea if this means I need to consider answering Yes to either of the above questions and also whether or not I have to consider filling out a Schedule R.Any guidance you can provide would be greatly appreciated.Thank you in advance.
Submitted: 10 days ago.
Category: Tax
Expert:  Barbara replied 10 days ago.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

Based on the information you have provided, the answer to both questions is no.

You reside in CA. The LLC was formed in CA and conducts its business there. You do not have any income to allocate. All of the income is derived in CA.

Please let me know if I can assist you further.

Thank you and best regards,