Quote Originally Posted by spanel View Post
Has he had profits in the last 2 years? If so, it wont take very long for the additional SE tax to eat up the cost of quarterly forms/tax return.

I have client who is a multi member LLC (partnership), has 70% ownership/profit/loss interest, and children , who split the remaining ownership interest/profits 15% each.

My client is collecting social security and not active in business, but has difficulty giving up control and children equity is nil and no interest in purchasing larger stake in business.

Both children are managing members and receive Guaranteed pymts of $70 k plus/yr.

I suggested they elect to be taxed as S-corp and allow 70% owner to be taxed as limited member and avoid SE taxes.

What is best scenario, if children don't want any increase in their respective profit/loss % ?

The children pay large fed/state estimated taxes as is, so Just looking for best scenario to lower their SE taxes/or Income taxes.

Appreciate any ideas.