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ja2022
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Multimember LLC - Husband and wife

My wife and I started a multimember LLC in March 2021 and operated our seasonal business from June through September.  Both of our names are on the LLC and we have not filed any tax returns yet since the creation of the LLC.  We regret adding both of our names to the LLC due to the increased filing requirements and want to go to a Schedule C filing for the business...

 

What is the easiest way to take one spouse off of the LLC membership?  (It is the desire of both parties to have just one spouse own the entire company)   One spouse withdrew from the operation of the business in December 2021...  Appreciate any help!

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1 Reply
DavidD66
Expert Alumni

Multimember LLC - Husband and wife

If you and your spouse are the only members of the LLC and you live in a Community Property State (AZ, CA, ID, LA, NV, NM, TX, WA, & W)I -  and you both participate materially in the business, then you can file using Schedule C and Schedule SE for your LLC.  If you do not live in a community property state, then you must file a partnership return (Form 1065) or, if you elect S-Corp status, Form 1120-S.  

 

Sine you were a multi-member LLC during 2021, you will have to file Form 1065 for 2021.  Going forward, one spouse can gift his/her interest in the LLC to the other spouse.  I would do so in writing as of 12/31/2021.  The spouse that receives the gift will then file as single member LLC on Schedule C.

 

 

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