Question

Change of Ownership in LLC Filing as a Partnership

Forum|Forum|6 years ago
September 16, 2019
1 reply
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In 2018, we owned 49% of Company ABC, which was formed as a multi member LLC that filed as a partnership (i.e. 1065). The other owner who owned 51% of Company ABC was an individual (not an LLC, corp, etc). Effective Oct 1, 2018, we left the company entirely and transitioned 100% of the ownership to the individual. The individual kept the LLC and just started treating it as a disregarded entity effective 10/1/18. We processed the necessary paperwork in 2018 to make this change. I am responsible for filing the tax return for the period 1/1/18 - 9/30/18. Does this need to be considered the final return for the LLC? The LLC is still in existence today but it does not file a partnership return.

A

Anonymous_

Employee

@SherryJ wrote:

I am responsible for filing the tax return for the period 1/1/18 - 9/30/18. Does this need to be considered the final return for the LLC?

You should actually seek professional tax and/or legal guidance with respect to this situation.

In any event, a final return (1065) needs to be filed because, effectively, the partnership (multi-member LLC) dissolved as a result of one of the two partners withdrawing.

Note that since the multi-member LLC effectively terminated on 9/30/18, that event ends the LLC's tax year. As a result, the 1065 was due by the 15th day of the 3rd month following the date the tax year ended and there could be penalties involved. Thus, the importance of seeking professional guidance.

See https://www.irs.gov/instructions/i1065#idm140538038010592 and

https://www.irs.gov/instructions/i1065#idm140538038386032