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?
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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=8343Last edited by Bees Knees; 03-31-2008, 08:42 AM. -
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?Comment
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TTB page 5-7 says:
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.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.Comment
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See Rev. Proc. 2002-69 for treatment in a community property state. One Sch C and two SE's.
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