I have an LLC (S-corp) that is 100% owned by a holdings company (another LLC). I own 100% of this holdings company. What name should show up at the LLC K1?

I have an LLC (S-corp) that is 100% owned by a holdings company (another LLC). I own 100% of this holdings company. What name should show up at the LLC K1? my name or the name of the holdings company? And do I need to file taxes for the holdings company, even if it is not a S-corp?

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1 Best answer

Level 13

Apr 15, 2024 4:52:53 PM

A few comments here:

In general, a LLC cannot be a shareholder of an S corporation since a company (LLC) is not an eligible shareholder.
However, there is an exception if the LLC is a single member LLC that is disregarded for federal income tax purposes. This appears to be your situation.
To avoid any issues, I recommend you issue the LLC taxed as an S corporation K-1 in your name and SS#. This will avoid any issues and potential red flags with the IRS.
Since the holding LLC is disregarded, the S corp K-1 should be reported as if you owned it directly.
There is no separate federal filing for the SMLLC Holding Company.

New Member

Apr 15, 2024 4:05:25 PM

Just clarifying, my EIN letter shows my name right under the name of the company as a sole member, but all the state documents (articles of incorporation) always show the holdings company as the shareholder. So I guess for tax purposes maybe i can issue the k1 under my name?

Level 13

Apr 15, 2024 4:52:53 PM

A few comments here:

In general, a LLC cannot be a shareholder of an S corporation since a company (LLC) is not an eligible shareholder.
However, there is an exception if the LLC is a single member LLC that is disregarded for federal income tax purposes. This appears to be your situation.
To avoid any issues, I recommend you issue the LLC taxed as an S corporation K-1 in your name and SS#. This will avoid any issues and potential red flags with the IRS.
Since the holding LLC is disregarded, the S corp K-1 should be reported as if you owned it directly.
There is no separate federal filing for the SMLLC Holding Company.

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I have an LLC (S-corp) that is 100% owned by a holdings company (another LLC). I own 100% of this holdings company. What name should show up at the LLC K1?