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I have an LLC in CA. Originally it was a partnership, filing…

I have an LLC in...
I have an LLC in CA. Originally it was a partnership, filing a 1065 to the IRS. Now, the other partners have left and I want to file as a single member LLC, flowing back into my schedule c. The changes take affect 12-31-17. Is simply telling Tax Act that I am 100% owner and that the k1s are final enough, or do I need to file another form reflecting the changes. Or is that something that happens at 2018s return. Just trying to make sure I tell the right information to the right people.
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Answered in 14 minutes by:
1/7/2018
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,153
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

You will enter the appropriate information when completing the 1065 and it should be marked final. Likewise, the K-1s generated should be final.

You can elect to be taxed as a disregarded separate entity, in which the LLC's profits and losses are passed through to you as an individual,

https://www.irs.gov/pub/irs-pdf/f8832.pdf

You can no longer use the partnership EIN and will need a new one. You will also want to cancel your account for the partnership EIN with the IRS.

https://www.irs.gov/businesses/small-businesses-self-employed/do-you-need-a-new-ein

https://www.irs.gov/businesses/small-businesses-self-employed/canceling-an-ein-closing-your-account

As to CA, the following link contains excellent information you will find helpful:

https://www.ftb.ca.gov/Archive/professionals/taxnews/2015/June/All_About_Business.shtml

Please let me know if I can assist you further.

Thank you and best regards,

Barb

Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,153
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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Customer reply replied 5 months ago
Thank you. I will be reading the publications you referred to. I was confused about what a disregarded entity is. I'm currently getting ready to file 2017 returns, so I am wanting to get things set up for 2018 correctly. I theory, will I end up filing an extra partnership return for the little bit of time in 2018, before the paperwork takes effect?

In your original question, you stated that the change took effect as of 12/31/17. If that is the case, mark the 2017 1065 as final as well as the K-1s to the partners.

Use 1-1-18 as the effective date on Form 8832.

Please do not hesitate to let me know if you have any other questions.

Thank you for the positive rating of my answer. It is very much appreciated.

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Customer reply replied 5 months ago
Thank you. I will let you know if anything else comes up. You have been very helpful.

My pleasure.

I look forward to hearing from you.

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Customer reply replied 5 months ago
I am confused about question 3. My company has several members, but I want to change to disregarded separate entity. No answers the question. Is this in reference to the 'new' classification?
Do I put my SSN in #4, I do have and EIN as an individual?

In your original question, you said that the other members/partners had left.

The answer to Question 3 is no.

Your name and SSN or your individual EIN would be entered in Question 4.

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Customer reply replied 5 months ago
They've left in reality, but I'm trying to do the paperwork. The yes answer talks about a partnership or being taxed as a corporation.
I don't really understand where the line between the old classification a the new classification is. Because the result is 4, me as an individual. I want everything to go to my schedule c instead of a 1065.

The LLC/partnership is electing to be treated as a disregarded entity.

It's is changing its entity classification.

The owner is you because the others have left.

Make sense?

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