Sole proprietor to 1 member LLC, is 8832 required?

[AZ-Tax]

Sole proprietor becomes a single member LLC. Is form 8832 electing to be "A domestic eligible entity with a single owner electing to be disregarded as a separate entity" need to be filed?

Taken from the IRS website link below, 4th paragraph down: "An SMLLC that does not elect to be a corporation will be classified by the existing federal guidance as a “disregarded entity” which is taxed as a sole proprietor for income tax purposes".

http://www.irs.gov/businesses/small/article/0,,id=158625,00.html

[JG EA]

Sole proprietor becomes a single member LLC. Is form 8832 electing to be "A domestic eligible entity with a single owner electing to be disregarded as a separate entity" need to be filed?

Taken from the IRS website link below, 4th paragraph down: "An SMLLC that does not elect to be a corporation will be classified by the existing federal guidance as a “disregarded entity” which is taxed as a sole proprietor for income tax purposes".

http://www.irs.gov/businesses/small/...158625,00.html

No, the 8832 is to elect a corporation only (since one person can't be a partnership). If not electing then the disregarded LLC is taxed as a sole proprietor. No, action is needed because the LLC is disregarded.

[Koss]

Yes, but...

I agree that Form 8832 is not used in this scenario.

However...

The LLC is a new entity, established under state law. It is in fact a disregarded entity, so for tax purposes, your client will continue to have a sole prop.

But because he has formed a new entity, he may need a new EIN.

BMK

[dsi]

Just curious, will your client be titling the assets in the name of the LLC?

[JG EA]

I agree that Form 8832 is not used in this scenario.

However...

The LLC is a new entity, established under state law. It is in fact a disregarded entity, so for tax purposes, your client will continue to have a sole prop.

But because he has formed a new entity, he may need a new EIN.

BMK

That is an important point - I have a client that is Sole prop with a new LLC and they need to start using that EIN (LLC) for their payroll starting 01/01 when the LLC begins. . And the name of the LLC goes on Schedule C. That's what I found out in research at any rate

[AZ-Tax]

Assets to remain titled in single members name.

Just curious, will your client be titling the assets in the name of the LLC?

As I understand, the assets will remain in single members name. Will that be an issue?

[Gary2]

As I understand, the assets will remain in single members name. Will that be an issue?

Not as far as income taxes are concerned; I'm not sure about payroll taxes. The real question is how that will affect the liability protection (which is the basic reason for an SMLLC).