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#1
04-02-2005, 08:14 AM
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 Re: S-Corp that owns an LLC "Emily" <emily2004f[at]yahoo.com> wrote: - quote - > OK, here's what I know:
Create a separate activity on the s-corp return.> An LLC is a disregarded entity. > An individual who is a sole member of an LLC would file > as a sole proprietor. > What if a Corp (an S-Corp, if it makes a difference) is the > sole owner of an LLC? The LLC is probably still a > disregarded entity. So, what should the preparer of this > return do: > Consolidate the LLC's income with the rest of the corp's > income? But it seems that would not do a lot toward > accurately reporting the income and expenses. (All the info > would be there, but it would be a mess to sort out.) > Prepare a statement showing the income of the LLC, then > adding the net income to some sort of "other income" line? > That would also seem to be problematic. > File a partnership return, and make the members the same > people as the S-Corp shareholders? No, I don't believe > that, either. > So, friends, what do you think the answer should be? Sadly, > it's not a hypothetical question. I need to make a decision > and prepare the returns, and I'm not finding any reference > to back up any of the above ideas. Consolidate the balance sheet. That's about 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 > << -------------------------------------------------> |
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04-02-2005, 03:47 AM
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| Re: S-Corp that owns an LLC "Emily" <emily2004f[at]yahoo.com> wrote: - quote - > OK, here's what I know:
This is essentially no different from a QSUB. What I do in> An LLC is a disregarded entity. > An individual who is a sole member of an LLC would file > as a sole proprietor. > What if a Corp (an S-Corp, if it makes a difference) is the > sole owner of an LLC? The LLC is probably still a > disregarded entity. So, what should the preparer of this > return do: > Consolidate the LLC's income with the rest of the corp's > income? But it seems that would not do a lot toward > accurately reporting the income and expenses. (All the info > would be there, but it would be a mess to sort out.) > Prepare a statement showing the income of the LLC, then > adding the net income to some sort of "other income" line? > That would also seem to be problematic. > File a partnership return, and make the members the same > people as the S-Corp shareholders? No, I don't believe > that, either. > So, friends, what do you think the answer should be? Sadly, > it's not a hypothetical question. I need to make a decision > and prepare the returns, and I'm not finding any reference > to back up any of the above ideas. that situation is to create a spreadsheet with all the relevant income, expense, and balance sheet items, with columns for each entity and a couple of columns for eliminations. It helps to have an income clearing line and a balance sheet clearing line. The balance sheet should also include a line for "investment in LLC." I hope you've got the return on extension! -- Tom Healy, CPA Boulder, CO Web: http://www.tomhealycpa.com << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
04-01-2005, 08:25 AM
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| S-Corp that owns an LLC OK, here's what I know: An LLC is a disregarded entity. An individual who is a sole member of an LLC would file as a sole proprietor. What if a Corp (an S-Corp, if it makes a difference) is the sole owner of an LLC? The LLC is probably still a disregarded entity. So, what should the preparer of this return do: Consolidate the LLC's income with the rest of the corp's income? But it seems that would not do a lot toward accurately reporting the income and expenses. (All the info would be there, but it would be a mess to sort out.) Prepare a statement showing the income of the LLC, then adding the net income to some sort of "other income" line? That would also seem to be problematic. File a partnership return, and make the members the same people as the S-Corp shareholders? No, I don't believe that, either. So, friends, what do you think the answer should be? Sadly, it's not a hypothetical question. I need to make a decision and prepare the returns, and I'm not finding any reference to back up any of the above ideas. Thank you, Emily << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| llc, owns, scorp |
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