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I want to dissolve a single member LLC (Delaware) which is

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a disregarded entity for tax...
I want to dissolve a single member LLC (Delaware) which is a disregarded entity for tax purposes. The LLC does not have any assets, no employees and no creditors. What do I have to file with the IRS?
Submitted: 5 years ago.Category: Tax
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5/1/2012
Tax Professional: winktax, Enrolled Agent replied 5 years ago
winktax
winktax, Enrolled Agent
Category: Tax
Satisfied Customers: 425
Experience: 18 years experience as an Enrolled Agent, insurance agent, stock broker and financial advisor.
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winktax :

A disregarded entity for tax purposes with no assets would simply not file Sch C. with Form 1040, with no assets to dispose of, there is no income and therefore no reporting requirement.

winktax :

If the disregarded entity was registered as an employer and has been filing Form 940, Form 941 or Form 944. Then those forms would need to filed and marked Final.

Customer:

The LLC never had employees.

Customer:

So there's no need to file Form 966 or any other form specified here:

Customer:

http://www.irs.gov/businesses/small/article/0,,id=98703,00.html

winktax :

No, an LLC as a disregarded entity is not considered a company, corporation or any form of separate legal entity for federal tax purposes. Is as simple as not filing Sch C.

Customer:

Aha. So all I have to do is to file for dissolution with the state of Delaware and do nothing with the IRS? What about canceling the EIN?

winktax :

Correct - Delaware. EIN - there is no method cancel or relinquish. You just stop using the number.

Customer:

OK. So this: http://www.irs.gov/businesses/small/article/0,,id=98703,00.html does not apply to my LLC?

winktax :

Yes/No - yes it applies but only if the LLC is doing the items listed (employees, assets, loans etc) you have none so it does not apply.

Customer:

Aha.

Customer:

I just remembered that my LLC bought a laptop two years ago. Is that an asset?

winktax :

Yes that is an asset, however it most likely was written off / expensed completely two years ago, thus tax wise it is an asset with a zero value on the books. Therefore nothing to report.

Customer:

Well, this is good news :-) Anything else I need to know?

winktax :

You may want to keep track of the EIN, the IRS will ask if you ever had a previous EIN if you apply for a new number at some point in the future.

winktax :

At least for a few years.

Customer:

Aha. Also, when I file my taxes next year, do I still need to include my LLC on my forms?

winktax :

Only if the LLC had income. if no income no reporting requirement, no Sch C required.

Customer:

Concluding, I only need to dissolve the LLC with the state of Delaware, and need not notify the IRS about this?

Customer:

Or submit any other forms?

winktax :

Correct. the IRS is only looking for the LLC to report if it has income, if no income they do not want any reporting.

Customer:

How cool is that! Thank you. Great talking to you!

winktax
winktax, Enrolled Agent
Category: Tax
Satisfied Customers: 425
Experience: 18 years experience as an Enrolled Agent, insurance agent, stock broker and financial advisor.
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