Dick Adams wrote:

- quote -

Can't say with "certainty", however when in doubt, ask the
question: "does anything in the tax code prohibit it"?

Cheer$,
Harlan Lunsford, EA in LA
"where we subscribe to the Internal Revenue Code and the Ten
Commandments, but not necessarily in that order."

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"Dick Adams" <rdadams[at]smart.net> wrote:

- quote -

Yes

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Dick Adams wrote:

- quote -

In this case, the burden would be on the ones asserting that
it cannot be a member. That is, what provision of the IRC
related to being an S corporation does having the
*corporation* as a member of an LLC (or, under the IRC, a
partnership or owning shares in another corporation) violate?

Phrased that way, I think it will be clear that those
asserting the "no" are going to have a problem.

I think the confusion is arising because someone is
"remembering" an issue--but an issue with entities that can
be *shareholders* in the S corporation.

There is a reason why tax research needs to start from the
Code and go forward, rather than being treated as a sort of
rote memorization of rules. The latter is how you quite
often have to approach preparing returns--the sheer volume
of the number of issues that have to be dealt with mean
that, in most cases, we end up working from memory.

But when a disagreement arises or we aren't sure, we have to
back away from that "memorize the rules" approach and swap
over to a research model--and that model generally starts
from the IRC. Conducting a "vote" of CPAs without any
reasoning on the table to back up the opinion isn't a valid
way to come to an answer.

--
Ed Zollars, CPA
Phoenix, Arizona

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"Dick Adams" <rdadams[at]smart.net> wrote:

- quote -

The answer is yes. No ambiguity on the topic.

--
David M. Woods, EA
Boston, MA 02109

Postings here are general information only and not to be
relied upon as advice.

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Dick Adams <rdadams[at]smart.net> wrote:

- quote -

In California, members of the the LLC can be a living
individual, a corporation, another LLC, a trust, or a
limited partnership. I would guess that most states follow
the same rules.

Alan
http://taxtopics.net

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I was at a party on Saturday. There were seven CPA's there.
Proof that my life has become shallow is that I party
with auditors and tax preparers <g
Three CPA's started discussing a joint venture practice.
One had her existing practice as a two member LLC with her
brother and the other two were operating a S-Corps. The
question arose "Can an S Corp be a member of an LLC?"

The consensus was:
1 - Yes
3 - I don't think so
3 - I don't know

Anyone know with certainty?

Dick

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