Discussion:Purchase of LLC
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Discussion Forum Index --> Tax Questions --> Purchase of LLC
8 January 2007 | |
| My client purchased 100% interest in LLC during the year 2006.I am not sure how to prepare the income tax return? Will it be two return for 2006 or one return? | |
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| 8 January 2007 | |
| What income tax return? Your client will file a 1040 for a personal return and if his LLC is a disregarded entity (Schedule C) that will be filed with his 1040. If it is a corporation, then yes, you will file (2) returns; a corporate one and an individual one. | |
| 8 January 2007 | |
| I mean tax return before sale of LLC and tax return after sale of LLC.All members are different after the sale.LLC continued with old FEIN. No new FEIN obtained. | |
| 8 January 2007 | |
| Hi Jigisha,
Realize that all 'LLC' tells us is that we do not know how the entity is taxed at the Federal level. This sounds like a partnership buy-out. A new EIN will be required as a one-member partnership cannot be. The final 1065 will be filed this TY as a final return. The SMLLC will go to the schedule C partial year unless the member chooses to be taxed as an corporation. | |
| 8 January 2007 | |
| Thanks Will. I was going to put that as a sideline and then got distracted...hehe
But a partnership as he says is dissolved if it relegates to one individual and the final return for the 1065 needs to be filed.... | |
| 8 January 2007 | |
| It was partnership before and partnership after the purchase. | |
| 8 January 2007 | |
| And I believe both partnership will file form 8308 with the tax return since there is purchase of inventory. | |
| 8 January 2007 | |
| If 50% or more of the partnerships capital interest changes hands the partnership effectively dissolves requiring a new EIN. (and a second return for this TY) Sec. 706
will | |
| 8 January 2007 | |
| I think so I will have to get more information from my client.Thanks for all these information. | |
| 13 July 2010 | |
| Hello folks,
I did not want to open a new thread since my question is about a purchase of an LLC. My clients are pursuing to take over an LLC which has residential real estate as an asset. They are looking to directly take over the LLC. As far as I know when %50 or more partnership interest is transferred the LLC gets dissolved. Am I accurate? What is (if any) the workaround for this issue? Clients are supposedly getting a better deal by doing this (I guess the sellers are trying to avoid certain closing costs, transfer tax etc.) I would appreciate any answer. | |
| 13 July 2010 | |
| Ozan, check out this thread Discussion:Termination_of_Partnership | |
