Steve wrote:
- quote -

Assuming of course that the LLC has NOT elected to be taxed
otherwise, default is partnership treatment, therefore no
member salaries.

ChEAr$,
Harlan Lunsford, GC and EA n LA

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Harlan Lunsford" <hlunsford[at]bellsouth.net> wrote:
- quote -

I didn't receive the prior post but it looks like LLC
members/partners should not be on the company payroll and
only draw a distribution from the LLC - is this correct ?

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Reed wrote:

- quote -

See John's reply above. I second that notion.

In fact we just had a discussion recently on the subject,
and since an LLC by default (that is if it has NOT opted to
be treated as a corporation) is treated as a partnership
for tax purposes, which of course means se tax and quarterly
1040es.

Which reminds me. Sep 15th is a'comin.

ChEAr$,
Harlan Lunsford, EA n LA

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

- quote -

In the name of simplicity, they are likely better off paying
quarterly estimated tax. If they want to be treated as
employees, that would be mandatory if they were to
incorporate. The reporting is more onerous and instead of
making one quarterly tax estimate, they'd be saddled with
filing 941's, quarterly, along with any state and local
requirements. If they were to incorporate, they might then
become really unhappy campers (depending on circumstances).
I really wouldn't suggest they not move in that direction,
without in depth knowledge of their situation. The best
advice I would give is that they use the KISS principle.
The simplest form is that of partnership (in their case).
I'd keep it that way unless there were compelling reasons
not to do so.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Reed wrote:

- quote -

IMHO, strictly forbidden for an LLC electing to be taxed as
a partnership, and completely permissible for an LLC
electing to be taxed as a corporation.

Phoebe

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

David Woods, EA, ChFC, CLU wrote:
- quote -

I suppose I could have said that better. But I didn't say
an LP can *only* have one general partner, but that it can
have *only one* general partner, which is correct. It can
also have more than only one, as you have stated.

Stu

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Has anyone determined whether there is a good way for two
50/50 LLC member/partners to place themselves on the regular
payroll? For convenience sake, they would rather have taxes
withheld, FUTA paid, etc. than to mess with Estimated
Quarterly Tax, self-employment tax, and so on. I have
advised them that this may not be kosher, but I wanted to
check to see if any of you have explored the ins and outs of
this.

Thanks!
REED

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Arthur L. Rubin wrote:

- quote -

Correction: A limited partnership must have AT LEAST
ONE general partner, but may have only one. (I'm sure
a few posters will note that....)

--
This account is subject to a persistent MS Blaster and SWEN attack.
I think I've got the problem resolved, but, if you E-mail me
and it bounces, a second try might work.
However, please reply in newsgroup.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Arthur L. Rubin wrote:

- quote -

I think a limited partnership must have at least one general partner. It
could have more then one general partner.

--
Frederick E. Jorden http://Tax-Accounting-Payroll.com
7825 Midlothian Tpk - 207 Richmond, VA 23235-5247
EMAIL knowtax[at]bigfoot.com
(804) 320-6210 FAX (804) 320-6211

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Hi everyone. This is my first post, so forgive me if it's not exactly in
the right place. My question is related, however. Is there any possible
way for two 50/50 LLC members to place themselves on the regular payroll,
alongside the employees, in lieu of taking fixed "guaranteed payments"
(meaning they, too, would be subject to withholding, FUTA, etc. and not
Quarterly Estimated Tax)? Or is that tactic strictly forbidden?

Thanks for your advice.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Hi everyone. This is my first post, so forgive me if it's not exactly in
the right place. My question is related, however. Is there any possible
way for two 50/50 LLC members to place themselves on the regular payroll,
alongside the employees, in lieu of taking fixed "guaranteed payments"
(meaning they, too, would be subject to withholding, FUTA, etc. and not
Quarterly Estimated Tax)? Or is that tactic strictly forbidden?

Thanks for your advice.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Arthur L. Rubin" <ronnirubin[at]sprintmail.com> wrote:
- quote -

Well that's not true either. It must have at least one, but
depending on the state law, I don't recall any restriction
on having more than one. In fact I've seen it.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

David Woods, EA, ChFC, CLU wrote:
- quote -

As far as I'm aware, you can't. But as someone else
mentioned, you can have a partnership of two partners but
only one a general partner (the other being a limited
partner).

Stu

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Ed Zollars, CPA wrote:
- quote -

I think what actually led to check the box was that all the
states requested and received letter rulings that their LLC
statutes satisfied the characteristics test for being taxed
as a partnership rather than an association.

In response the IRS threw up their collective hands, because
it just made the whole thing much more complicated for them
to sort out. As far as I'm aware, the law doesn't provide
for check the box - the IRS created it as their
acknowledgement that they didn't know what the heck else to
do.

Stu

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Stuart Bronstein wrote:

- quote -

Except that those cases predated "check the box" which is
what we are operating under now. The argument is that what
you effectively had was a corporation and not a partnership,
based on the characteristics test. Of course, LLCs had
problems with the same test, which is what eventually led to
check the box...

--
Ed Zollars, CPA
Phoenix, Arizona

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Stuart Bronstein" <spamtrap[at]lexregia.com> wrote:
- quote -

Let me rephrase the question. When can you possibly have a
partnership without at least two partners?

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Stuart Bronstein wrote:

- quote -

Except that those cases predated "check the box" which is
what we are operating under now. The argument is that what
you effectively had was a corporation and not a partnership,
based on the characteristics test. Of course, LLCs had
problems with the same test, which is what eventually led to
check the box...

--
Ed Zollars, CPA
Phoenix, Arizona

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Stuart Bronstein wrote:
- quote -

I'm afraid this is getting a little far afield, but a
limited partnership can have only one general partner.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

David Woods, EA, ChFC, CLU wrote:
- quote -

A general partnership can't have one partner, because then
it would be a proprietorship.

Stu

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Ed Zollars, CPA wrote:
- quote -

Actually, they have been created, by using a corporation
without significant assets as the sole general partner.
When this has happened, the IRS has, on occasion, attempted
to tax the partnership as an association taxable as a
corporation.

Depending on exactly how the partnership was created,
sometimes they'd win and sometimes not.

Stu

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->