Discussion:LLC, C corporation as member
From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.
From TaxAlmanac
Discussion Forum Index --> Consumer Questions --> LLC, C corporation as member
| 4 November 2009 | |
| Is there a requirement for an LLC that has a c corporation as a member, to be taxed as a corporation or can the LLC be taxed as a partnership by default? If there is a requirement where can I find that information? | |
| 4 November 2009 | |
| Unless the LLC files Form 8832 with the IRS to be treated as another type of entity, a domestic LLC with at least two members is automatically classified as a partnership for Federal Income tax purposes. See Treas. Reg. §301.7701-3(b). If the C corporation is the LLC’s sole member, then the LLC is treated as a disregarded entity, and all of its income, deductions, etc. are reported on an 1120. | |
| 4 November 2009 | |
| I agree. An LLC would be taxed as a partnership unless the C corporation was its only member. | |
| 4 November 2009 | |
| So would the information on the k-1 from the LLC just be included on the corporation's 1120? | |
| 6 November 2009 | |
| Yes, just as if it were a partnership, if it has more than one member. That's the point. If the C corp is the only member, it doesn't file a 1065 or have a K-1 to give the C corp. Its income and expenses are included with those of the C corp; it is treated for tax purposes as a division, not a separate entity.
Read the regulation that Dave cited above. In fact, read all of the 7701-3 "check the box" regs. If you are going to work with LLCs, you need to know those regs like the back of your hand. | |
To join in on this discussion, you must first
log in.
