One or two 1065s

[Pepper]

First, I think this new message board is FANTASTIC! I'm so happy a friend called me today to tell me about it.

I have a question about a new client that came to my office the other day regarding his partnership. He has a NV LLC (parent) that was issued an EIN. A month or so later, he opened another LLC in CA, umbrellaed under the NV p'ship, which was given a new EIN.

Will I have to file two 1065s or ignore the CA EIN? I'm really confused at this point and would like your opinions on how I should proceed. Sorry for imposing, but I need a rather quick answer to this as I need to give him an answer this weekend.

Thank you in advance. Pepper

[Bees Knees]

two in one

I assume both partnerships have identical partners, and that the combined business activity of both could be done on one 1065 with proper allocations to each partner. Otherwise, if you have different ownership allocations between the two partnerships, you would need to file two 1065s so that the K-1s for each partner would come out right.

Assuming both partnerships could be filed on one 1065, I would call IRS and see if they want you to close down one of the EINs. I would think that if you don’t need to be filing two 1065s, the IRS won’t want you to.

[S T]

Two EIN #'s

I agree, probably one form 1065, But doesn't Nevada income and California income have to be apportioned for the state filings?

How to report the partner's distribution? Part is Nevada, part is California. Is the partner a California resident??

If so, California taxes on all source income. Isn't the partner receiving income or losses from both Nevada and California??

How to report to California would be the next question??

Sandy

[DTS]

NV and CA LLC

Bees and Sandy,

All percentages of pass-through income and losses are identical for both the EINs to each member. I will talk to the client and tell him to get rid of the second EIN for CA.

Sandy, at this point, I'm not totally sure exactly how CA wants to have this shown. He is a CA resident so I would think all the income will have to be reported unless they will allow the NV portion to be excluded somehow. ??? Don't know how this can be done. Seems like I recall a Schedule R that will do this.

I need to do some research on this and/or contact FTB and get an answer. Have you heard of this schedule? If so, is this the correct one? You're in CA and I could sure use you're expertise, if you have the time.

Thank you both. I appreciate your help.

Dennis

[DTS]

Some additional info

Bees,

On June 24, you suggested I have the client get rid of one of the EINs because of the 2 LLCs being identical. I did pursue this with the client, but I still have not had this question answered by the client as of the end of last week.

I did call the IRS to find out how to get this completed, but wanted to know if you know how long it takes to do this? IRS could not give me any idea. Could you give me a timeframe, if you know?

Thank you, Dennis

[Unregistered]

LLCs

As far as the IRS is concerned they are not recognized entities. You could chave one own the other-liabilbity issues-two state issues and still have one tax reporting entity. Correct??

[Bees Knees]

Time frame

Bees,

I did call the IRS to find out how to get this completed, but wanted to know if you know how long it takes to do this? IRS could not give me any idea. Could you give me a timeframe, if you know?

Thank you, Dennis

No, sorry, I have no idea how long IRS takes on things like this. It could be days, it could be years.

I had a client a couple years ago file after her husband died. She was due a refund from overpaid estimates. Later that summer, IRS sends her a bill. Naturally, as many clients do, she never tells me IRS sent her a bill. She just pays it.

About 6 months later when I discover it, I have to start the long process of power of attorney, and so on and so forth trying to find out why they sent her a bill? Turns out, the estimate was paid under her deceased husband's SSN. So when she filed using her SSN, even though the husband was still mentioned on the return as a decedent (with his SSN in the spouse box), IRS never gave her credit for the estimate. Thus the bill.

After explaining to the nice lady at the IRS, she said she would put in for a refund check to be issued.

I asked how long that would take?

Well, IRS employees are not trained to know how long things will take. That is not something that registers in their brain fact patterns.

She had no idea how long it would take. All she knew was that the system now knew what to do with all of this money floating around the treasury department.

Try about 2 and a half years, after more phone calls, letters, promises to pay, etc. etc. etc. before she finally got her $240 back.