I have a LLC with husband and wife being the only members so with the new law I plan to report the restaurant business on a Schedule C (either 1 or 2 schedule C’s). 2007 was their first year in operation. In 2008 the husband and wife plan to bring in a 3rd member which I assume will mandate them to file a Partnership automatically for 2008, correct? Will it be wiser and more convenient to file a Partnership in 2007 since I will file one in 2008? Keep in mind the LLC did NOT elect to be taxed as a Corp.
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An LLC doesn't qualify as a 'qualified joint venture' under the new rules for filing two Schedule Cs. Since you are in AZ, you may be able to get by with a joint Sch C under the community property rules (disregarded entity) if that was allowed in the past..because of the new definition, now I'm not sure if a H/W LLC qualifies for a joint Sch C. But since you are going to add a new member, I might just start out with a 1065.
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