Change from Dual to Single Member LLC

[Sabre]

Two brothers in an LLC -in the past we filed a from 1065. At 12/31/09 one partner wants out. I am checking his K-1 as final.

Since there will be no form 1065 in the future is there any box to check to let the IRS know not to expect a 1065 in the future or should i just add a statement to the return.

Kirk

[Burke]

There is a box on the 1065 which says Final as well.

[Sabre]

Final Return

Burke,

Thanks for your response-I do know about the final box on the form 1065 I just didn't know if checking that might somehow signal the irs that there was no more llc even a single member one.

It seems like when i had researched this for some one else that a 50% or more change in LLC ownership causes the termination of the LLC even though one partner may remain. A local attorney felt otherwise.

[Gretel]

I think we deal with two separate issues. One is the state level. An amendment needs to be filed with the state but the LLC will continue as before.

Second, the 1065 LLC for IRS purposes will be ended and taxpayer needs to apply for a new FEIN for a SMLL.

[Burke]

That is correct. An LLC is a state chartered organization, and each state's rules may be different about its structure. The taxpayer will have to make the appropriate notifications as to the members, status, etc through them. As far as the IRS is concerned, they will no longer look for a 1065 if you check Final on it.