Partnership 1065 change to S Corp 1120S

[JB...]

Hello everyone,

A friend of mine has a Multi Member LLC that has been getting taxed as a Partnership (Form 1065) for 2022-2024 and as a Pass-Through Entity at the State level. They submitted a Form 2553 in early 2025, claiming REV PROC 2013-30 late filing relief, to be treated as an S Corp effective 1/1/2025. They received an IRS letter in June 2025 stating the S Corp election was accepted effective 1/1/2025 and that no other actions need to be taken.  It doesn't say that they need to file a FINAL Form 1065 for the Partnership, it only goes on to remind them to pay a reasonable salary to all shareholder-employees in 2025. 

Are they able to simply file a Form 1120S (same Name and EIN) for 2025 in place of the Form 1065 and just copy over the 12/31/2024 Balance Sheet and continue 2025 as if nothing has changed other than the form they are filing, and the Shareholder Salaries of course? They have a small amount of assets, partially depreciated, but no debt.

Or do they have to Amend their 12/31/2024 Form 1065 as FINAL and sale the assets at Book Value to the S Corp? Any help would be greatly appreciated!

[M-MTax]

You shouldn't have to do anything other than file your 2024 1065 as usual and then your 2025 1120-S. You're not getting a new EIN so that continues for tax purposes.

This is really a transfer and not a sale and note that this entire deal is strictly for federal income tax purposes (you still have an LLC for the purposes of state law).

[JB...]

@M-MTax Thanks for the reply. That was my initial thought when they showed me the IRS acceptance letter, and I read up on Rev Proc 2013-30 which seems to imply that you will only be approved as a "streamline" S Corp late filer if you have been previously filing in a matter consistent with an S Corp. Basically a Pass-Through with no prior year tax impacts that differ Partnership vs S Corp; other than potentially over-paying SE Taxes those first couple of years if you were a profitable start up.  But I am unable to find any documentation stating the "streamline" result is to simply continue on with the 1120S as of the effective date. It does seem like that is the logical intent of the procedure, to allow less complex LLCs to move into S Corp status without shutting down and restarting when there is no tax effect.

The State half is not a problem as both Partnerships and S Corps are filed on the same Pass-Through Entity form where the only difference is the box you check.  

[M-MTax]

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@JB... wrote:

The State half is not a problem as both Partnerships and S Corps are filed on the same Pass-Through Entity form where the only difference is the box you check.  

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Yes, for state income tax return purposes. I meant that as far as state law is concerned, you still have an LLC, not a corporation (i.e., you're still members in the LLC for all other purposes, not shareholders in corporation, since you organized an LLC and did not incorporate).