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Discussion:Minnesota Husband/Wife LLC

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Discussion Forum Index --> Basic Tax Questions --> Minnesota Husband/Wife LLC


Discussion Forum Index --> Tax Questions --> Minnesota Husband/Wife LLC

Beengel (talk|edits) said:

December 9, 2008
I have a client that just informed me yesterday that he and his wife started a business, and set it up as an LLC in Minnesota. They are the only members, and this is secondary income to their day jobs.

I have been researching this, and think that they can each file a Sched C rather than a partnership for federal taxes and I think state also. Is this correct? Profit looks like about $5500 for 2008.

Kevinh5 (talk|edits) said:

9 December 2008
[try this search]

Kevinh5 (talk|edits) said:

9 December 2008
you are not correct (according to the IRS)

Beengel (talk|edits) said:

December 9, 2008
I did read the above referenced posts prior to posting.

I also read on the IRS site that "For tax years beginning after December 31, 2006, the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28) provides that a “qualified joint venture,” whose only members are a husband and a wife filing a joint return, can elect not to be treated as a partnership for Federal tax purposes."

Ths was read at: http://www.irs.gov/businesses/small/article/0,,id=177376,00.html

So what I am looking for clarification is if a schedule C for both is OK if they make the election to be treated as a joint venture....

Kevinh5 (talk|edits) said:

9 December 2008
Discussion:Husband/wife_members_of_LLC*

make sure you read that link all the way through to the end, as the answer changes as time progresses

Then read Discussion:Has anyone heard of Election 761(f)??

* edited by Trillium: Instead of reading that entire H/W members of LLC discussion Kevin linked to, just see the article he posted there on 1/1/09. Here's a cut/paste of his post: NATP update to question of QJV holding real estate which corrects some of our thinking from earlier this year.

Beengel (talk|edits) said:

December 9, 2008
Partnership- 1065--

Too bad it is not a community property state to do the Sched C.... May have to refer this one out...

Thanks!

Kevinh5 (talk|edits) said:

9 December 2008
The fact that I had participated in these discussions helped me find them for you. If I hadn't it would have taken me 3 or 4 more minutes.

Riley2 (talk|edits) said:

9 December 2008
There is nothing in the statute that would prevent this couple from making the QJV election. However, the IRS has posted a news release indicating that the QJV election cannot be made for state law entities. There is no basis in law for the IRS news release.

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