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CRM4
Level 1

How to Switch TTax Business from LLC to S-Corp When Filing My 2020 Tax Return?

For tax year 2014-2019 I used TurboTax  Business to file my IRS Tax form as a 2 (99% and 1%)member LLC. In early January 2020 the 1% member passed away. In Jan. 2020 I filed Form 8832 and 2553 with IRS. For 2020 I was 100% owner. Now I have my TTax 2020 business software open, but I do NOT see an option to file  Form 1120-S, U.S. Income Tax Return for an S Corporation. My only options at the TTax start are LLC, LLP, Limited partnership, General Partnership.  How do I file S-Corp?

I read the below article but it does not answer my question

https://turbotax.intuit.com/tax-tips/small-business-taxes/can-i-convert-my-llc-to-an-s-corp-when-fil...

1 Best answer

Accepted Solutions
JeffreyR77
Expert Alumni

How to Switch TTax Business from LLC to S-Corp When Filing My 2020 Tax Return?

You will need to file the final partnership return for the period up until your partner passed. 

 

At that point you no longer have a partnership. 

 

Your Form 8832 and 2553 will likely not be approved by the IRS as you do not have a partnership that is electing to be treated as an S-Corporation.   

 

You should apply for a new EIN for a new single member LLC and submit a Form 2553 for that entity retroactive election to January 2020. 

 

Your justification for the retroactive election is the former multimember LLC ceased to exist and had to be reorganized as a single member.

 

You then can prepare your initial S-Corporation return.  

 

Please clarify if you established payroll for yourself under the S-Corporation.  You are required to pay yourself reasonable compensation for services provided to the corporation.

 

 

 

 

View solution in original post

5 Replies
Mike9241
Level 15

How to Switch TTax Business from LLC to S-Corp When Filing My 2020 Tax Return?

you need to file a final partnership return for 2020.  you need to start a new return for the S-Corp.

CRM4
Level 1

How to Switch TTax Business from LLC to S-Corp When Filing My 2020 Tax Return?

so i file the final LLC return for 2020 AND a new s-corp Form 1120-S for 2020? Two tax returns for 2020? Or not file the S-Corp until the tax year 2021 return?

CRM4
Level 1

How to Switch TTax Business from LLC to S-Corp When Filing My 2020 Tax Return?

@Mike9241 hi mike, please answer my question in response to your comment ASAP. thank you

JeffreyR77
Expert Alumni

How to Switch TTax Business from LLC to S-Corp When Filing My 2020 Tax Return?

You will need to file the final partnership return for the period up until your partner passed. 

 

At that point you no longer have a partnership. 

 

Your Form 8832 and 2553 will likely not be approved by the IRS as you do not have a partnership that is electing to be treated as an S-Corporation.   

 

You should apply for a new EIN for a new single member LLC and submit a Form 2553 for that entity retroactive election to January 2020. 

 

Your justification for the retroactive election is the former multimember LLC ceased to exist and had to be reorganized as a single member.

 

You then can prepare your initial S-Corporation return.  

 

Please clarify if you established payroll for yourself under the S-Corporation.  You are required to pay yourself reasonable compensation for services provided to the corporation.

 

 

 

 

View solution in original post

CRM4
Level 1

How to Switch TTax Business from LLC to S-Corp When Filing My 2020 Tax Return?

@JeffreyR77  thank you for the comprehensive answer

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