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Level 3
posted Jan 6, 2023 6:17:21 PM

Filing Taxes for LLC Parent Entity using TT (first year filing)

I have a Holding Co, LLC that is owned by a husband and wife by entirety

 

That Holding Co owns two other LLC Co - Co A and Co B

 

Co A is a small commercial building and Co B is a Salon in that building.

 

Since Co A and B are wholly owned by Holding Co I will assume they are disregarded for tax purposes and as such I will not report anything to IRS for either A or B as individual entities.

 

Can I also assume I will only enter information for the Holding Co in turbotax and report the combined activity for the real estate Co A and the Salon Co B subsidiaries. 

 

These are very small entities and I am trying to keep it simple. Any links or suggestions would be appreciated. Also feel free to write long responses 🙂

 

In Summary how do I handle these 3 entites in TT...

0 9 1978
9 Replies
Level 15
Jan 7, 2023 6:39:22 AM

In short, the Holding Co, LLC would file a Form 1065 with K-1s issue to the spouses (members) and would report income/expenses from A and B on the 1065.

 

I will page @Rick19744 for further input.

 

Regardless, for your first year, you should seek guidance from a local tax and/or legal professional.

Level 13
Jan 7, 2023 10:06:59 AM

I agree with @Anonymous_ :

  • All reporting of the activities will be done on a single form 1065 since the Co A and B are disregarded entities of the LLC.
  • Be sure to input the income and expenses in the proper place; Co B is ordinary trade or business and will be reported on page 1 and Co A is a rental and will be reported on form 8825 and then flows to Sch K.
  • Also be sure to understand if you have any form 1099 reporting requirements since there is a specific question related to this form.
  • I also agree that for the initial year it may be in your best interest to meet with a tax professional to make sure you start out in the right direction.  Regardless of the size of the business, penalties hurt and can be time consuming.

Level 3
Jan 8, 2023 12:52:32 PM

Thank you and I agree with the suggestion.

Level 3
Jan 8, 2023 12:54:05 PM

Thank you and will do.

Level 3
Jan 30, 2023 1:56:43 PM

Does any know if the IRS will view the husband and wife "Tenants by entirety" ownership of the holding company as disregarded or as partnership? The TBE is the only owner of the holding Co. 

 

If disregarded then i go to Schedule C if partnership then 1065 to K1 to 1040. (assume no re activity to keep it simple)

 

In the responses above the assumption is partnership is that absolute or can i consider the disregarded path. 

 

Thanks in advance 

Level 15
Jan 30, 2023 2:01:43 PM

@Lloyd2 

 

TBE is strictly for state law purposes. 

 

If you are married, you can use the QJV election and file on Schedule C rather than as a partnership on Form 1065.

 

See https://www.irs.gov/businesses/small-businesses-self-employed/election-for-married-couples-unincorporated-businesses

Level 3
Jan 30, 2023 2:27:40 PM

i dont qualify for the QJV because i dont live in a community prop state im in FL also the operations are incorportated via llc and that QJV is for married couples operating a business unincorporated :(

Expert Alumni
Jan 31, 2023 6:05:11 AM

If you do not live in a community property state, the husband-wife LLC is NOT a disregarded entity and your LLC has to file form 1065.

Level 15
Jan 31, 2023 6:57:49 AM

@Lloyd2 wrote:

i dont qualify for the QJV because i dont live in a community prop state im in FL also the operations are incorportated via llc and that QJV is for married couples operating a business unincorporated :(

You are correct; if you operate in the form of a state law entity, such as an LLC, you do not qualify for QJV treatment and will have to file a 1065.