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September 10, 2024
Question

There is no Individual/Sole Proprietor option in the entity dropdown list in K-1 worksheet

  • September 10, 2024
  • 2 replies
  • 0 views

I am preparing to file Form 1065 for my LLC.  a few members of this LLC are sole proprietors that operate their business under their own name and EIN.  

 

In Turbotax, I input the members' info as individuals,  and Turbotax does not allow me to file said TINs in wrong formats.  it has to be in xxx-xx-xxxx SSN format.  if I choose the member is not a person, and then input EIN, Turbotax asks me to input the entity type for the EIN, and there is ndividual/Sole Proprietor option in the entity dropdown list.   

 

How do it get this problem solved?  or I have to print it out and mail it for filing

2 replies

Employee
September 11, 2024

@brilliantusa  I am confused as to your entity ownership.  What I get is 

(a) You have a partnership / multi-member LLC

(b) Some of the members themselves also have sole proprietor business.

(c) Are you saying g that these sole proprietorships  ( dis-regarded entities )  entities are members  OR the sole-proprietor  owners  ( persons ) are members ?

(d) Partnerships themselves  ( at entity level) obviously can be natural person or   fictitious  person.

 (e) my sense of  your entity is a partnership of persons with SSN but obviously there should be no issue having  an EIN if the member  does business  as an entity -- if TubroTax gives you trouble you can always enter the EIN  in the SSN format.  For tax purposes though a single member LLC is disregarded entity and files schedule-C with owner SSN

Does this make sense ?

September 11, 2024

your understanding is right.  

 

it is a multiple-member LLC.

some members have sole proprietor businesses

the sole proprietor owners are members

 

thank you for your suggestion, I will put the EIN in SSN format.  

September 11, 2024

maybe not quite understanding. are you say that their business are the members of the LLC not them individually.

if so based on what you provided their businesses (sole proprietorships) are disregarded and the k-1s go to the owners which means you need the owners SSN

 

if there business were S-corps or partnerships then the k-1's would be issued in the name of the S-corp or partnership and the EIN would be used. 

 

the issue is at their end. filing a schedule C doesn't allow for reporting k-1s from pass through entities (like your partnership). rather they would report as if the k-1 was received directly by them. 

Employee
September 11, 2024

I agree with Mike9241.  Because a sole proprietorship is a disregarded entity, the individuals, not the individuals' sole proprietorships, are the partners in the partnership and must provide you with their SSNs, not their EINs.