multi-member LLC

[skhaleghir]

Hello,

My friend and I are the founders and the only members of our LLC. We registered the company on December 17, 2020 in California. My friend lives in Canada but in the Statement of Information, we used my California home address as his address. Should we choose partnership? What type of partnership we should select, the foreign partnership?

thank you

Saeed

[Mike9241 · Accepted solution]

you are not a foreign partnership because you are organized under the laws of CA

per 1065 instructions

A foreign partnership is a partnership that isn't created or organized in the United States or under the law of the United States or of any state.

with a foreign partner you have complicated your reporting requirements.  i would suggest you seek the services of a tax pro

Question 14 on form 1065
Answer “Yes” if the partnership had any foreign partners (for purposes of section 1446) at any time during the tax year. Otherwise, answer “No.”
If the partnership had gross income effectively connected with a trade or business in the United States and foreign partners, it may be required to withhold tax under section 1446(a) on income allocable to foreign partners (without regard to distributions) and file Forms 8804, 8805, and 8813. See Regulations sections 1.1446-1 through -7 for more information.

Whether you have any reporting requirements for Canada is unknown.

[skhaleghir]

Hello,

thanks for the quick response.

Since I already purchased the TurboTax business software, I want to use it to file my tax return. So I need your support to guide me through this process. 

At the beginning, I selected "multi-member LLC". In the next page, it asked me "Partnership Name". Is this the other owner name? When I put his name, then it asked me "What type of partnership is 'his name'?" 

should I select U.S. Limited Liability Company?

regards,

Saeed

[DaveF1006]

Here you will put the name of your partnership. If the name of the partnership is in your partner's name, then that is the name you will record for the name of the partnership. Put the name that the partnership is registered under in the state of California.

Also select US Limited Liability Company since this is a partnership registered in the US.

[skhaleghir]

Thank you for the response,

I am still kind of confused. We didn't registered the company as a Partnership, so there is no name for the partnership registered under in the state of California. The company is a regular LLC with only two member. When I selected the multi-member LLC, why it asked me a partnership name? should I use the company name?