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Using loans to offset negative capital accounts for Partnership to S-Corp conversion
A three-member LLC that has been taxed as a partnership has negative equity apportioned across all three capital accounts. The members want to elect S-Corp taxation, which as you all know is a deemed liquidation whose proceeds are used to buy shares in a new S-Corp and distribute those shares to the members, so the S-Corp inherits all liabilities... -
Self-Rental of Home Office for MMLLC
A husband-wife multi-member LLC taxed as a partnership has an operating agreement that requires each member to maintain a home office. Presently, the members claim the expense of these home offices as UPE on their joint return (1040). The husband (who owns their current home solely in his name) wondered about the value of renting a portion of their...