Partnership to Sch C based on new law

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  • AZ-Tax
    Senior Member
    • Feb 2008
    • 2604

    #1

    Partnership to Sch C based on new law

    With the new law allowing husband/member & spouse/member LLC to now file a Sch C opposed to a Partnership in 2007, can I file a Sch C in 2007 for a husband/member & spouse/member LLC even though for the last 2 tax years we filed a Partnership for the LLC?
  • Bees Knees
    Senior Member
    • May 2005
    • 5456

    #2
    You can't do it if they are a two member LLC. Only single member LLCs can file a Schedule C. Two members, including H&W LLCs must file 1065 or elect to be taxed as a corporation.

    See this thread for a cite: http://www.thetaxbook.com/forums/showthread.php?t=8343
    Last edited by Bees Knees; 03-31-2008, 08:42 AM.

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    • AZ-Tax
      Senior Member
      • Feb 2008
      • 2604

      #3
      TTB page 5-7..Sch C or Partnership

      I read this over dozen times, being here in AZ, sounds to me like the husband member & wife member LLC who did not elect to be taxed as an s-corp. have the option to file a Sch C or partnership but it must be 2 Sch C's. Am I reading that correctly? If I am, then my question remains the same, can I file the 2 Sch C's even though the last 2 yrs (before the new law) they filed partnership returns?

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      • Bees Knees
        Senior Member
        • May 2005
        • 5456

        #4
        TTB page 5-7 says:

        Single-member LLC. A single-member LLC is not treated as a
        separate entity for federal income tax purposes. A single-member
        LLC owned by an individual files Schedule C (or Schedule E
        or F, if applicable). Exception: A single-member LLC can elect to
        be taxed as a corporation. See Check the Box Rules in Tab 18 of the
        Deluxe Edition or Tab SB2 of the Small Business Edition.
        I fail to see where you get the idea that this applies to a husband and wife joint venture. The paragraph is talking about a single member LLC. A husband and wife joint venture is not a single member LLC. It is an LLC made up of two members.

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        • solomon
          Senior Member
          • Aug 2006
          • 1012

          #5
          Originally posted by AZ-Tax
          With the new law allowing husband/member & spouse/member LLC to now file a Sch C opposed to a Partnership in 2007, can I file a Sch C in 2007 for a husband/member & spouse/member LLC even though for the last 2 tax years we filed a Partnership for the LLC?
          See Rev. Proc. 2002-69 for treatment in a community property state. One Sch C and two SE's.

          Last edited by solomon; 03-31-2008, 12:00 PM. Reason: Addition

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