I have an LLC (S-corp) that is 100% owned by a holdings company (another LLC). I own 100% of this holdings company. What name should show up at the LLC K1?

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April 15, 2024
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I have an LLC (S-corp) that is 100% owned by a holdings company (another LLC). I own 100% of this holdings company. What name should show up at the LLC K1? my name or the name of the holdings company? And do I need to file taxes for the holdings company, even if it is not a S-corp?

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Best answer by Rick19744

A few comments here:

In general, a LLC cannot be a shareholder of an S corporation since a company (LLC) is not an eligible shareholder.
However, there is an exception if the LLC is a single member LLC that is disregarded for federal income tax purposes. This appears to be your situation.
To avoid any issues, I recommend you issue the LLC taxed as an S corporation K-1 in your name and SS#. This will avoid any issues and potential red flags with the IRS.
Since the holding LLC is disregarded, the S corp K-1 should be reported as if you owned it directly.
There is no separate federal filing for the SMLLC Holding Company.

rebeccabrisollaAuthor

Just clarifying, my EIN letter shows my name right under the name of the company as a sole member, but all the state documents (articles of incorporation) always show the holdings company as the shareholder. So I guess for tax purposes maybe i can issue the k1 under my name?

Rick19744Answer

Employee

A few comments here:

In general, a LLC cannot be a shareholder of an S corporation since a company (LLC) is not an eligible shareholder.
However, there is an exception if the LLC is a single member LLC that is disregarded for federal income tax purposes. This appears to be your situation.
To avoid any issues, I recommend you issue the LLC taxed as an S corporation K-1 in your name and SS#. This will avoid any issues and potential red flags with the IRS.
Since the holding LLC is disregarded, the S corp K-1 should be reported as if you owned it directly.
There is no separate federal filing for the SMLLC Holding Company.

*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.