Gary Goodman wrote:

- quote -

Correct, except that if the LLC has a calendar year-end, then
the due date for the $800 for the *2006* tax year is April 15th.

The due date for the *2005* Form 568 (or the extension) is also
April 15th. Of course, to reduce the interest that will be owed
on the late payment, the $800 relating to the *2005* tax year
should be paid ASAP.

Regards

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pgattocpa[at]excite.com says...
- quote -

Thanks for the response Peter.

The actual business operations are in Calif. so it appears
that the client is as hare-brained as I suspected. He
didn't even tell us about the new entity. I discovered it
when I found an extra checking account coded to his name (I
work for a bank/wealth management firm.) The LLC doesn't
have much if any operations yet.

To summarize, it appears that the client is late on one
filing and payment of $800 in franchise tax and another tax
return is due on March 15th, along with another $800 tax
payment.

Gary

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pgattocpa[at]excite.com wrote:
- quote -

Right. But there's still the $800 minimum franchise tax.

Stu

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pgattocpa[at]excite.com wrote:

- quote -

Correction to the above. The minimum fee of $900 does not come
into effect until there is at least $250,000 of gross receipts.
If gross receipts are less than $250,000, then there is no fee
due.

Apologies for the mistatement.

Peter C. Gatto, CPA

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Gary Goodman wrote:
- quote -

All general comments - your client's situation may be
materially different in which case my responses would change.

I will assume by "incorporated" you meant "formed" and by
"corporation" you meant "LLC". If the client checked-the-box
in order that the SMLLC be treated as an association and taxed
as a corporation, then the SMLLC files federal Form 1120 and
CA Form 540 and the client does not include it on his Schedule C.

However, I will go on the assumption that the LLC is a
disregarded entity.

From your question, I am assuming the LLC has CA nexus. An
LLC is considered to be doing business in CA if any of its
member(s), managers or agents are conducting business in CA
on behalf of the LLC.

If so, then, yes it must file CA Form 568. LLCs formed in CA
also must file (whether doing business in CA or not). The form
can be filed in two ways:

1) A full-blown 568 with a K-1 to the SM; or
2) Sides 1 and 3 (Sch. K) only. Side 1 has lines for two
separate signatures:
a) the normal "under penalty of perjury" signature; and
b) the "I promise to report everything on my own T/R" signature

Since the SM has to file its own return that includes all
items of income, deduction, gain, loss and credits from the
disregarded SMLLC, I have never seen a disregarded SMLLC file
a full-blown 568. In your client's case, this would be the
Schedule C.

Keep in mind Federal - CA differences. The 568 Schedule K is
based on CA tax law, not federal. For instance, the SMLLC
invests in bonds that are tax-free for federal purposes, but
not for CA purposes.

The $800 LLC tax was due on the 15th day of the fourth month
after the BEGINNING of the taxable year. In this case, it
would be from the date of formation in 2005. So, it may or
may not be late at this point.

The LLC fee (which is based on gross receipts) is due on the
15th day of the fourth month after the CLOSE of the taxable
year. (The minimum fee is $900; the max is $11,790.)

- quote -

I just got an e-mail alert from Spidell's that the FTB is
launching an audit initiative that will be looking at Nevada
corporations. I assume they will also be looking at any other
entity-types formed in Nevada.

Peter C. Gatto, CPA

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A client formed a single member LLC during 2005. Does
California have a filing requirement for it? IOW, do we just
use the loss from the Federal SchC? It was incorporated in
Nevada, so it's a foreign corporation if that makes a
difference.

FYI: 104 days left until April 17, 2006.

Gary

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directly, please send an e-mail to: gary at gdgoodman dot com.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >