I am a financial advisor and I receive a 1099 form my Broker Dealer. I have an LLC that I want to file as a Scorp or Ccorp; how do I get the income into the corporation

[SweetieJean]

So you haven't set up an S or C Corp yet?  And the 1099 is from 2015?

[TaxGuyBill]

If the LLC is doing the work, the 1099 should be issued to the LLC’s name and EIN, not your name and Social Security number.

Have you already make the election for the LLC to be taxed as a corporation?

Are you SURE you want it to be taxed as a corporation?  I highly recommend going to a tax professional before you make the decision.  Corporations can be complicated and expensive.  Many people do not realize what is involved with running a business that is taxed as a corporation, and end up spending more time and money than they save.
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[SweetieJean]

And could OP even retroactively move the 1099 there, if it's from 2015?

[bwa · Accepted solution]

If the LLC is doing the work, the 1099 should be issued to the LLC’s name and EIN, not your name and Social Security number.

And, to do that, the llc must contract with the Broker/Dealer to perform the services.

I've seen cases where in the Real Estate field, a RE salesman cannot be an llc or corporation, because the state requires that every salesman must be supervised by a Broker.  As an llc cannot be supervised, and as a salesman cannot assign income to anyone else (including his own llc), only the salesman can receive the income.

I'm not sure what requirements your state or Broker/Dealer may have for Financial Advisors, but you want to be sure that the llc can work for the Broker/Dealer, not you personally.

[stockfinancialburger]

The problem is is that FINRA currently doesn't allow commissions to be paid to a non-licensed entity aka an LLC, S-corp, etc. They have to be paid to you the RR and then that can be put into the business account as income, just one extra step. The good thing is the 1099 commission income you receive is gross, so just make sure you have a paper trail going from you personal to business account. 

[DG50]

When you assign income from personal to business account  IRS may see it as just a capital contribution not income to LLC/S Corp, correct? And since entity is non licensed pass through on income will come via SSN# not Tax ID of LLC or S Corp. Is this any different if it's from RIA instead of B/D? Can they pay directly through LLC or does it have to go through IAR and than advisor can assign it to LLC? However if IRS views as this assignment to LLC as just capital contribution and not income it may be a moot point.

[jmarms]

Here's a great article on the subject: https://www.kitces.com/blog/fleischer-s-corporation-commissions-for-brokers-insurance-agents-financi...

[SweetieJean]

That article is 5 years old, and talks about S Corps.  There have been tax law changes since then.  The original question is from 2020, and asks about an LLC.

[jmarms]

I understand your point and you are correct that the laws have changed but as they pertain to what the OP said,  to my knowledge, some of it has not changed.  The key facts in the OP are that the individual is a financial advisor and is affiliated with a BD.  Again, to the best of my knowledge, a BD, by law still can only pay an individual not an LLC or a corporation.  If you can link to an IRS or tax case that proves me otherwise please do as this is something I am currently work on in my own business (I am also a FA).  Again, to my knowledge, and I'm not a CPA or tax professional, but my understanding is that commission cannot be paid to an entity only an individual however, advisory fees/wrap fees/etc. (whatever you want to call them) can be paid to an entity (an LLC and/or an S-Corp).  Make sense?