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    Re: to my prior post

    in 2012 LLC had partners, one main partner 97% and rest were guaranteed pay plus 1% of profit, if any. (in 2012, no profit). In 2013, LLC not doing well, 1% partners all found other jobs, 97% partner running business alone. In 2013, will this become an unregarded entity and I should file the LLC as a Sch C? How do I end the LLC partnership ? File a return with no figures and mark final return? confusing and agitated that this is happening this week!

    #2
    Ask the Partners

    This return is late so any decisions to end the Partnership or continue it at least for the calendar year ending 12/31 should be made quickly. The Partnership will be assessed late filing penalties but these penalties can be waived if they have reasonable cause or they use the provisions under Rev Proc 84-35 (but all partners must timely file reporting their K-1s or their share of income/loss on their timely filed returns).

    I'm assuming the other partners have filed timely returns and the 97%er is under extension.

    I would ask the 97% partner what he wants to do. Either way, this can't be filed as a "disregarded" entity until the Final Year Partnership return is filed....which is late.

    My suggestion to the 97%er would be to get this thing filed, email the K-1s to the other partners and encourage them to file amended returns if they already filed, or to file timely with their K-1s. That late file penalty is $195 per partner per month; not pretty.

    It may not be your fault the return is late, but when the IRS letter comes....who do they always blame??
    Circular 230 Disclosure:

    Don't even think about using the information in this message!

    Comment


      #3
      Did the 1% partners 'officially' leave the partnership?

      If so, the partnership ENDED on the date when the business was down to one person. Unless that was on December 31st, that is a "short year" return that is due 3.5 months after the end of the 'ending' month (marked as a "final" return). The rest of the year the business would be a "disregarded entity" (probably on Schedule C). If the partnership ended in the early or middle part of the 2013, the return is really late.

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