Can I enter zero for ownership percentage for an LLC member who had no involvement, zero investment, zero income?

[Anonymous_]

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@Doug_L wrote:

If you're concerned about the answer mentioning partner and not member, I'd like to point out that

IRS Publication 541 (March 2022) states:

A domestic LLC with at least two members that doesn't file Form 8832 is classified as a partnership for federal income tax purposes.  

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Again, the dichotomy between state law and federal income tax law surfaces.

There may be no difference between a general partner in a partnership and a member in a multi-member LLC (treated as a partnership by default) for federal income tax purposes but there are differences with respect to those states that have adopted the ULLC (particularly in terms of liability and apparent authority).

[Rick19744]

@Doug_L stated

"If you're concerned about the answer mentioning partner and not member, I'd like to point out that

IRS Publication 541 (March 2022) states:

A domestic LLC with at least two members that doesn't file Form 8832 is classified as a partnership for federal income tax purposes."

No one is concerned about that at all.  I specifically indicated in my previous response that those words are used interchangeably sometimes when an LLC is taxed as a partnership.

There are many issues where there is no guidance from the IRS on specific areas.  This is done by design when specific issues hinge on the facts and circumstances of the specific taxpayer.

As stated previously, the IRS will generally frown on an interest in a partnership that is less than 1%; this was also noted in my previous reply.

And once again, there are differences between what is allowed for state law purposes and what is allowed for federal law purposes.

We have provided our thoughts on the matter and you either need to make a decision on your own, or better yet, get guidance from an attorney as was also noted previously.