Newbie With LLC

I have a new 8-plex and have formed a LLC. I believe it is taxed as a partnership(because 2 or more involved...Me and Wife..is this correct)...flows through...has anybody used Turbo tax to do there taxes for a LLC....if so...which version is best???? Or any suggestions would be helpful...Thanks....jmooch

Comments(7)

  • jus10mh14th April, 2004

    Hello jmooch,
    I believe you are correct, as an LLC's profits pass-through to its members and taxes are applied at the individual level. I don't have the ability to paste web addresses but you should check out the articles on William Bronchick's site legalwiz as they touch on the LLC tax issues. I haven't worked with turbotax at all so I'm of no help there.

    On a side note, it's quite a coincidence that you also live in Glen Carbon! Do you do alot of investing in the Edwardsville and Glen Carbon areas? I am a beginner and would appreciate any advice you have on the area or general information. Drop me an email if you have any time!

  • DaveT14th April, 2004

    Check with the TurboTax software developer. Call the customer service number and ask which version of their product completes the Form 1065 and the K-1s for your partnership.

    When you get an answer, come back and post it to this thread.

  • jmooch14th April, 2004

    Gee...thanks Dave T.....smile....I did find out since my partner in the llc is my wife we can elect to file as a parntership or sole proprietor....I will try customer service, but I am sure there won't be too long of a wait on the 14TH!!!....have a great day..

  • DaveT14th April, 2004

    Better check again. I don't think you can be a sole proprietor and still have a partner.

    However, if you reside in a community property state, your state may allow you and your wife to treat your LLC as a single-member disregarded entity. You do not want to operate rental property as a sole proprietor (Schedule C and Schedule SE), when a disregarded entity (Schedule E) gives you a better tax treatement.

    Consult a licensed tax professional to determine exactly how a partnership return (Form 1065 and Schedule K-1) flows through to your 1040.

  • jmooch14th April, 2004

    I got the following from Bronchick's article....Are you saying that it is better to file as a partnership regardless even though my partner is my spouse....thanks for your thoughts...

    TWO CHOICES FOR THE "FAMILY" LLC

    An LLC formed between husband and wife has a choice for filing. Since a husband and wife business can normally report as a partnership or sole proprietor, they have the same choices with an LLC. Thus a husband and wife LLC can choose to file a 1065(partnership return) or simply report on Schedule ?C?.

  • jmooch14th April, 2004

    To do form 1065 and k-1's you must use Turbo tax Business....not Home and Business....but Business. Then you also have to buy the product for your personal return....

  • DaveT14th April, 2004

    Just in case you missed my point, reporting your rental income on Schedule C makes your income subject to Self-employment taxes.

    Reporting the same rental income on Schedule E, eliminates self-employment taxes. Given a choice between filing as a sole proprietor and filing a partnership return, you want to choose the partnership.

    Someone else will have to answer the question about a husband and wife team being treated as a sole proprietor (makes sense only if you file a joint return).

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