Discussion:Was MMLLC...now SMLLC
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Discussion Forum Index --> Tax Questions --> Was MMLLC...now SMLLC
| 14 April 2007 | |
| Father and son (cabinet shop) formed a two member LLC, with lawyer drawn operating agreement, in 2005. Filed a 1065 in 2005.
Son took over as 100% owner (er...member) Jan 1, 2006. Question: Can we file a Schedule C (as SMLLC) in 2006 rather than 1065? If yes, would you advise I also prepare a "Final" 1065 return (with all goose eggs) for 2006 and send that in as well just to cover our butts? :) Jim F | |
| 14 April 2007 | |
| your tax partnership terminated when son took over...one of the following happened:
1) Son bought dad's interest 2) Dad gifted interest to Son 3) Dad withdrew In the first two, you have a liquidating distribution of a 1/2 undivided interest in all assets to each member, followed by a transfer of the dad's interes in the assets to the son. If a gift, no gain or loss, no step up, and may need to file gift tax return. If sale from dad to son, then dad has to report sale of assets, and son get's step up in basis. If Dad withdrew, there is again a liquidating distribution, but what each party got you will have to figure out. In any event, the liquidating distributions should be reported on a final 1065. I believe the Sched C can not use the ein of the mmllc. ...my two cents. | |
