Discussion:Partnership LLC Question

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Jomamab (talk|edits) said:

13 April 2006
I am a new user to Tax Alamnac and I have a question regarding a Partnership LLC. This is a husband /spouse partnership that was changed to an LLC from a regular partnership Jan 1 05. (lets call it LLC) The old partnership was kept open and had a name change and is entirely another business.(Lets call it Old) Owned by same partners. Because they had employees they were forced to get a new ID # and everything was transfered to LLC.

Now the partners needed a new car for the LLC, and purchased it in June 05. The partners were unable to secure a loan for the truck through the LLC, however were able to secure loan personally. The liability insurance recognizing the LLC status put the owners on as Lessors of Truck and Trailer. Truck will be mostly used by LLC and the trailer was made especially for use with (Old) partnership.

What are the options? Can partners take lease money personally and the LLC write it off? Of course recognizing Lease Income. If they do this can they take the Section 179 on the truck?

Would they be better to transfer Truck to LLC?

I figure the truck usage with the special trailer will be charged as mileage usage to the (Old) partnership.

The options will make a big difference to the tax returns.

Natalie (talk|edits) said:

13 April 2006
Is the Old partnership going to continue doing business? Was there income in 2005?

Jomamab (talk|edits) said:

14 April 2006
Yes, the Old partnership is doing a totally different business than the LLC. Yes there was a little income around 10,000. It is a new concept and is sort of seasonal. They are promoting it for this year and will probably begin picking up business soon.

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