LLC filing

[ivonnesales]

Hello, I had an ecommerce LLC. business from Jan to Dec this year and dissolving it now. Although a sole member I would like to keep it separate and file it as a corporation. Can I file now or do I have to wait till Jan.?

[tagteam]

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@ivonnesales wrote:

Hello, I had an ecommerce LLC. business from Jan to Dec this year and dissolving it now. Although a sole member I would like to keep it separate and file it as a corporation. 

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You might want to clarify the statements quoted above. 

As a single-member LLC (with you as the sole member), did you make an election to be treated as a corporation (either a C or S corporation)? You would know whether you filed either Form 8832 or Form 2553.

[ivonnesales]

I have not filed yet. Started LLC Jan. 2021, dissolving Dec. 2021.

[Carl]

Unfortunately, you can't do that. The election to have an LLC treated like an S-Corp or C-Corp must be made at the time the LLC is established/open, or within a short timeframe (60 days I think) after that. Since your intention is to dissolve the LLC by the end of 2021, it makes absolutely no sense to want that anyway. If you could do it, you'd just be creating unnecessary paperwork and costly filing requirements that will have little (if any) benefit to you at all. Just report the business income/expenses on SCH C as a part of your personal 1040 tax return indicating that you both opened and closed/disposed of the business in 2021, and be done with it.

[tagteam]

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@ivonnesales wrote:

I have not filed yet. Started LLC Jan. 2021, dissolving Dec. 2021.

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Then you will file a Schedule C with your individual income tax return (Form 1040) on or before the deadline for filing individual income tax returns. You cannot file for the 2021 tax year at this point in time.

[Rick19744]

Some comments:

• Your question is not real clear. 
  • Are you wanting to just end your current business completely and start a new business line?
  • Or are you just wanting to continue with the same business, but just in a different entity structure?
• This forum is not the best way to talk through these types of questions, but if you are going to stay in the same business and just want to do so in a corporation, you can do that.
• You would simply file form 8832 and follow the questions.
• One issue with this, is you need to have an EIN when completing the form 8832.  So you will need to obtain one if you don't already have one.
• Part I question 8 asks the effective date of the change.  This will be key so make sure you read the instructions to the form.
• Keep in mind, that your state may require some type of change documentation.
• Even if you do change, you will follow @tagteam note on 2021 filing, as the change will not be effective until 2022.
• The final unknown is whether the entity will remain a C corporation or whether you want to elect S corporation status at the same time.  This has not been addressed.  If this is the case, I would recommend having a one on one with a tax professional to make sure this if handled correctly, as a foot fault could be costly.

[ivonnesales]

Thanks everyone. I got it from here 😊