Husband and wife are both part of a LLC Partnership 50/50, and live in california, do we still need to file form 1065, please advise

[tonyjoeramirez]

We used to file as  a sole proprietary , but now the LLC , the main member added her husband to be 50/50.   So I believe we have to file form 1065 and give them both a K-1.  They live in California.  Do we still need to file form 1065.  Please advise.

[Opus 17]

Because CA is a community property state, you can file as 2 disregarded entities/schedule C businesses, each reporting half the income and half the expenses.

What is unclear to me, is whether you MUST do it this way, or could choose to file the LLC partnership return instead.

[SweetieJean]

Who are you in all this?

[tonyjoeramirez]

I am the tax preparer,  they are my clients
And threw a left curve on me when we are finishing their extended return

[TaxGuyBill · Accepted solution]

As Opus pointed out, you have the OPTION to file Form 1065 *OR* file two separate Schedule Cs (an LLC in a non-community property state does not have that option). 

Assuming an extension wasn't filed for the 1065, using two Schedule Cs will avoid the $2800 late-filing penalty.

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

As SweetieJean pointed out, this forum is for TurboTax users.  If you are a tax professional, please post any future questions on a professional forum.

[SweetieJean]

Sorry, but TT is not licensed for use by paid tax preparers. Go here instead:

https://proconnect.intuit.com/proseries/