Sole Proprietor for part of the year and LLC the rest of the year

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  • tsuewalker
    Member
    • Feb 2013
    • 88
    #1

    Sole Proprietor for part of the year and LLC the rest of the year

    I have a client who was a sole proprietor for half the year and a single member of an LLC the last half. Do I need to do another kind of return for him besides a 1040? Do I need to do 2 Sch. C's with the SSN on one and the EIN on the other. He was issued different 1099's, one with his SSN for part of the year and one with his EIN for the rest of the year. Do I need to do 2 different 1099's for his contract laborers as some of them worked for him the first half of the year while he was operating under his SSN and then also worked for him the last half of the year, after he became an LLC. I've never dealt with a client who has become an LLC and I'm not sure how to file his return.

    Thanks for your help in advance. I really appreciate it.
    Tags: None
    • RitaB
      Senior Member
      • Jul 2008
      • 1382
      #2
      You're right

      Originally posted by tsuewalker
      I have a client who was a sole proprietor for half the year and a single member of an LLC the last half. Do I need to do another kind of return for him besides a 1040? Do I need to do 2 Sch. C's with the SSN on one and the EIN on the other. He was issued different 1099's, one with his SSN for part of the year and one with his EIN for the rest of the year. Do I need to do 2 different 1099's for his contract laborers as some of them worked for him the first half of the year while he was operating under his SSN and then also worked for him the last half of the year, after he became an LLC. I've never dealt with a client who has become an LLC and I'm not sure how to file his return.

      Thanks for your help in advance. I really appreciate it.
      Yes, prepare two Sch C's, and yes, issue 1099-Misc forms for two businesses. Then, in my state (TN), you'd prepare a Franchise and Excise Tax Return for the LLC.
      If you loan someone $20 and never see them again, it was probably worth it.

        Comment

        • Nashville
          Senior Member
          • Nov 2007
          • 1129
          #3
          Oh No...Rita is Back

          Oh No...Rita is Back (oops I just said that didn't I?) Trouble's Back in Town!!
          Last edited by Nashville; 02-02-2016, 05:14 PM.

            Comment

            • ttbtaxes
              Senior Member
              • Jan 2011
              • 580
              #4
              Why two Schedule C? Why not one and include the EIN IN Box D? The LLC is a disregarded entity and both the SSN and EIN are listed on Schedule C.

                Comment

                • RitaB
                  Senior Member
                  • Jul 2008
                  • 1382
                  #5
                  Well

                  Originally posted by ttbtaxes
                  Why two Schedule C? Why not one and include the EIN IN Box D? The LLC is a disregarded entity and both the SSN and EIN are listed on Schedule C.
                  Well, I may be back, but I don't know everything. However, it would sure flow a lot better to the TN Franchise and Excise Tax Return for me. Only the LLC is subject to FAE tax for TN purposes. So, I'd do two. Your mileage may vary on that.
                  Last edited by RitaB; 02-02-2016, 05:51 PM.
                  If you loan someone $20 and never see them again, it was probably worth it.

                    Comment

                    • RitaB
                      Senior Member
                      • Jul 2008
                      • 1382
                      #6
                      Mmmm hmmmm

                      Originally posted by Nashville
                      Oh No...Rita is Back (oops I just said that didn't I?) Trouble's Back in Town!!
                      Sure enough. Watch yourself, Nashville, it that's your real name.
                      If you loan someone $20 and never see them again, it was probably worth it.

                        Comment

                        • taxea
                          Senior Member
                          • Nov 2005
                          • 4292
                          #7
                          I agree with TTBtaxes. 1 Sch C...disregarded entity. All 1099's reported on the 1 Sch C.
                          Believe nothing you have not personally researched and verified.

                            Comment

                            • Burke
                              Senior Member
                              • Jan 2008
                              • 7068
                              #8
                              If I lived in a state such as TN, I agree with Rita. Two separate schedules makes better sense.

                                Comment

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