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PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4512
Experience:  35 years tax experience, including four years at a Big 4 firm.
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Our CPA filed a "no activity" return that held title to

Customer Question

Our CPA filed a "no activity" return for LLC that held title to vehicles used by sister corp, yet assets and associated liabilities (loans) were on on the corp's balance sheet. I realize this would not give us the limited liability protection we sought, but what will the IRS think of such a situation.
Submitted: 1 year ago.
Category: Tax
Expert:  PDtax replied 1 year ago.

Hi from Just Answer. I'mCustomer I will assist.

Expert:  PDtax replied 1 year ago.

This is a common filing, as many small entities have little to no activity at some point in their existence. IRS is accustomed to seeing these. They are often a precursor to a final return and a liquidation.

And it does give liability protection, as you report you continue to hold the assets in a business structure. You need not be operating to get the liability protection the entity provides.

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