Discussion:California Single Member LLC issue

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Discussion Forum Index --> Advanced Tax Questions --> California Single Member LLC issue


Discussion Forum Index --> Tax Questions --> California Single Member LLC issue

Taxaddict1 (talk|edits) said:

9 April 2014
Any California tax professionals around?

I have this client who owns a disregarded LLC (SMLLC). But I think California still requires the filing of Form 568. My tax program (Drake) does generate the Form 568. But it is all blank. It does not carry the income and expenses from the Federal Schedule C to the Form 568 at all. Is it right?

DebP (talk|edits) said:

9 April 2014
There are probably some codes you need to fill out to have the carry over to the Form 568 - on Lacerte I need to check a Box on the Schedule C page that it's an SMLLC. However, as it's a gross receipts tax, you really are only going to see the gross receipts on the 568 return.

Michaelstar (talk|edits) said:

9 April 2014
Here is the link to the form instructions:

https://www.ftb.ca.gov/forms/2013/13_568bk.pdf

Go to page 11 and you'll find your answer as to how it s/b done.

Taxpro69 (talk|edits) said:

9 April 2014
On the schedule c input you need to mark box for special tax treatment code as SMLLC, in state input you need to fill out info for single member LLC tab for at least the following: Demo, Ques, Main, SM, IW and OFF. If you are not familiar with CA taxes Drake is one of the worst options as there is a lot of extra input required to get a CA return to come out correctly.

Taxaddict1 (talk|edits) said:

9 April 2014
Taxpro69, I thought only page 1 2 and 3 are required if it is a disregarded entity. Only under some special situations would the other pages such as the Schedule B be required.

Taxpro69 (talk|edits) said:

9 April 2014
Pages 1-3 and 7 (LLC Income Worksheet) are minimum required. The information required to complete those is on the input screens I said. If a SMLLC 568 is required a CA 540 will also be required. If you do not have good knowledge of CA tax law and differences between federal and CA law the return will not come out correctly as Drake requires a lot of the adjustments be entered in the state return. Almost all business returns or individual returns with k-1's. sch c or f I have done in Drake require at least some extra input in CA module. Our office went back to Lacerte for 2013 so have not prepared any returns in Drake this year but 2009-2012 we used Drake. If you know what you are expecting on the CA return you can get the correct results and eventually know what extra input is required, but if you are not a CA tax preparer, or do not prepare a lot of CA returns chances of getting return correct with Drake are not great.

Joanmcq (talk|edits) said:

10 April 2014
Don't forget the $800 minimum franchise tax that will be due.

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