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jamesjoaozinho
New Member

I chose the wrong election for LLC started in March 2016. My wife is a member, but I operated more as a sole-proprietorship. I'm e-filing. When do I send form 8832?

I started an LLC in March of 2016 and not knowing any better at the time, I added my wife as a member. I have done all of the work for this LLC as a sole proprietor more so and I didn't know that we would have to file as a partnership and then submit a Schedule K-1, etc. The LLC didn't make any money and I don't want to go through all of that. I learned about Form 8832 to change my election as a partnership to become a sole proprietorship as initially intended so I can just file Schedule C in joint filing with my wife. Would I send the form alone? Print a PDF of my taxes afterwards and attach them? I don't want to make anymore errors, so I'd appreciate any guidance.

1 Best answer

Accepted Solutions
Rick19744
Level 12

I chose the wrong election for LLC started in March 2016. My wife is a member, but I operated more as a sole-proprietorship. I'm e-filing. When do I send form 8832?

Don't panic.  I will add a few comments and thoughts and questions:

  • When you "started" the LLC are you saying you formally organized it under your particular state law?  Filed articles of organization, etc?  Doesn't sound like it.
  • By default, a single member LLC is a disregarded entity for income tax purposes (federal and most states); the same filing as a sole proprietor.
  • By adding your wife you really don't accomplish much from an income tax perspective and there is not really any issues with shifting of income since I assume you file a joint tax return.  
  • Since all of this took place in 2016, depending on your response to the first question, I would just file as a sole proprietor.  This will not be an issue as you are not harming the IRS in any way, no tax avoidance or evasion issues since all of the income goes on the same return. 
  • Given your facts, there is no reason to file the form 8832.  Even LLC's taxed as a partnership that then become a single member LLC DO NOT file form 8832.  The change just happens.
  • At this point depending on your response to the initial question, the only issue that could possibly need addressed is to clean up some administrative issues with your particular state.
*A reminder that posts in a forum such as this do not constitute tax advice.*

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2 Replies
Rick19744
Level 12

I chose the wrong election for LLC started in March 2016. My wife is a member, but I operated more as a sole-proprietorship. I'm e-filing. When do I send form 8832?

Don't panic.  I will add a few comments and thoughts and questions:

  • When you "started" the LLC are you saying you formally organized it under your particular state law?  Filed articles of organization, etc?  Doesn't sound like it.
  • By default, a single member LLC is a disregarded entity for income tax purposes (federal and most states); the same filing as a sole proprietor.
  • By adding your wife you really don't accomplish much from an income tax perspective and there is not really any issues with shifting of income since I assume you file a joint tax return.  
  • Since all of this took place in 2016, depending on your response to the first question, I would just file as a sole proprietor.  This will not be an issue as you are not harming the IRS in any way, no tax avoidance or evasion issues since all of the income goes on the same return. 
  • Given your facts, there is no reason to file the form 8832.  Even LLC's taxed as a partnership that then become a single member LLC DO NOT file form 8832.  The change just happens.
  • At this point depending on your response to the initial question, the only issue that could possibly need addressed is to clean up some administrative issues with your particular state.
*A reminder that posts in a forum such as this do not constitute tax advice.*
hqpmrkmd
New Member

I chose the wrong election for LLC started in March 2016. My wife is a member, but I operated more as a sole-proprietorship. I'm e-filing. When do I send form 8832?

What if I did file articles of organization the filed to remove my wife
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