Filing Taxes for LLC Parent Entity using TT (first year filing)

Forum|Forum|3 years ago
January 7, 2023
3 replies
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I have a Holding Co, LLC that is owned by a husband and wife by entirety

That Holding Co owns two other LLC Co - Co A and Co B

Co A is a small commercial building and Co B is a Salon in that building.

Since Co A and B are wholly owned by Holding Co I will assume they are disregarded for tax purposes and as such I will not report anything to IRS for either A or B as individual entities.

Can I also assume I will only enter information for the Holding Co in turbotax and report the combined activity for the real estate Co A and the Salon Co B subsidiaries.

These are very small entities and I am trying to keep it simple. Any links or suggestions would be appreciated. Also feel free to write long responses 🙂

In Summary how do I handle these 3 entites in TT...

TurboTax Business Windows

Anonymous_

Employee

In short, the Holding Co, LLC would file a Form 1065 with K-1s issue to the spouses (members) and would report income/expenses from A and B on the 1065.

I will page @Rick19744 for further input.

Regardless, for your first year, you should seek guidance from a local tax and/or legal professional.

Lloyd2Author

Thank you and I agree with the suggestion.

Rick19744

Employee

I agree with @Anonymous_ :

All reporting of the activities will be done on a single form 1065 since the Co A and B are disregarded entities of the LLC.
Be sure to input the income and expenses in the proper place; Co B is ordinary trade or business and will be reported on page 1 and Co A is a rental and will be reported on form 8825 and then flows to Sch K.
Also be sure to understand if you have any form 1099 reporting requirements since there is a specific question related to this form.
I also agree that for the initial year it may be in your best interest to meet with a tax professional to make sure you start out in the right direction. Regardless of the size of the business, penalties hurt and can be time consuming.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.

Lloyd2Author

Thank you and will do.

Lloyd2Author

Does any know if the IRS will view the husband and wife "Tenants by entirety" ownership of the holding company as disregarded or as partnership? The TBE is the only owner of the holding Co.

If disregarded then i go to Schedule C if partnership then 1065 to K1 to 1040. (assume no re activity to keep it simple)

In the responses above the assumption is partnership is that absolute or can i consider the disregarded path.

Thanks in advance

Anonymous_

Employee

@Lloyd2

TBE is strictly for state law purposes.

If you are married, you can use the QJV election and file on Schedule C rather than as a partnership on Form 1065.

See https://www.irs.gov/businesses/small-businesses-self-employed/election-for-married-couples-unincorporated-businesses

Lloyd2Author

i dont qualify for the QJV because i dont live in a community prop state im in FL also the operations are incorportated via llc and that QJV is for married couples operating a business unincorporated 😞