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Ask Lane Your Own Question
Category: Tax
Satisfied Customers: 11819
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I would like to set up a partnership LLC with two LLC's

Customer Question

I would like to set up a partnership LLC with two LLC's I guess. One under Eragon Homes with 99% controlling interest, It's just me, Am I an entity or and Individual? I'd like to set up another LLC in my Moms name with 1% ownership and be responsible for
those taxes myself. Saphira Investments LLC < I believe this LLC should be from Wyoming? Are we both to be named in the others LLC Do we use legal names? Is the 1% entity a member of the first LLC?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.



Yes, anytime there is more than one member in an LLC, the LLC is taxed as a partnership, (still no tax paid at the partnership level) ... everything flows through a K-1 to the owner's 1040.


But only single member LLC's file a schedule C and are taxed as a disregarded entity

Expert:  Lane replied 1 year ago.

Now, you can set up the LLC's (through the LLC operating agreement) to share profits and losses in any way you like (where corporations are restricted to sharing profits and losses based on ownership percentage)

Expert:  Lane replied 1 year ago.

The only thing that using two LLC's does is segregate liability ... Creditors and lawsuit of one can't come after the other (IF you follow the LLC laws of the state and don't allow a creditor or lawsuit to "pierce that corporate veil" by using alter-ego theory)

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