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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 11813
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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If a LLC files as a partnership, but no income in the year,

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If a LLC files as a partnership, but no income in the year, only 200 expense. All members of the LLC are foreigners, and they didn't have any other income in USA, so they do not need to file US tax returns. In this case, does the LLC still need to file 1065 and K-1?

Thanks,

NPVAdvisor :

Normally your partnership would file a Form 1065 tax return, however, in a year where you receive no income and where you have no expenses which will be treated as deductions or credits for federal tax purposes, then you are not required to file this form.

Please refer to the instructions for "Who Must File" on page 3 of the following 1065 instructions.

http://www.irs.gov/pub/irs-pdf/i1065.pdf

NPVAdvisor :

Remember, an LLC is actually established under state statutes and not under federal statutes. Because of that, the IRS really does not recognize the LLC itself as a tax entity. Single member LLC's are never required to file any type of form, even when they have income. The only real purpose for having a multi-member LLC file is so that the income from the multi-member LLC can be allocated to the respective members. When there is no income or expenses to allocate, you are not required to file any type of form.

If you were actually established as a C Corporation or an S Corporation under federal guidelines, then those are tax entities which are required to file forms, even in years where there is no business activity, but this will not apply in the case of your LLC partnership.

NPVAdvisor :

Hope this helps

NPVAdvisor :

Lane

Customer:

Thanks, XXXXX XXXXX in this case, although only 200 expense happened, the LLC still doesn't need to file 1065, because the members can't use it as deduction or credit on their own tax returns?

NPVAdvisor :

Yes, exactly ... you'll see it stated that way in the instructions for form 1065

Customer:

Yes, I read it and I want to make sure what I understand is correct. Nice to meet you here again and thanks very much. Lucia

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