Wrong Name on 1099-G (LLC, not me)

[CA_Tax_Payer]

I have a 1099-G from the USDA reflecting an agriculture payment issued to a single member LLC (my wife and I are the only members).  The 1099 lists the recipient as the LLC but TT H&B won't let me correct the name. All the information on the form is correct.  It (TT) also asks if the payment was made to me, by wife, or both when if fact it was made to the LLC -- but 'neither' isn't an option.  This is a Farm Rental situation if that matters.

[DianeW777]

Do not enter the 1099-G form itself. Instead simply add the dollar amount as a cash payment you received when completing your Form 4835 fir farm rental.  The document itself is not required to be entered because that is a convenience.  As long as the income is reported on the tax return that is the only requirement.

If you already entered the 1099-G, delete that and enter the income directly as 'cash' for example. Select that the money was paid to one of  you, it's not important which one is selected.  

Note: SMLLC IRS 

If an LLC is owned by husband and wife in a non-community property state, the LLC should file as a partnership. LLCs owned by a husband and wife are not eligible to be "qualified joint ventures" (which can elect not be treated as partnerships) because they are state law entities. For more information see Election for Husband and Wife Unincorporated Businesses.

As noted by @Opus 17 if you are in a community property state you can choose a disregarded entity and file a Schedule C for each of you by splitting income and expense.

[Edited: 02/04/2022 | 6:06a PST]   @CA_Tax_Payer 

[Opus 17]

It's not a single member LLC if it has two members.

Unless you live in a community property state, the LLC must file a separate partnership return form 1065 to report the income and expenses of the LLC.  Each member get a K-1 statement to report their share of income and expenses on their personal return.  Form 1065 is due March 15, and the late fee is $195 per month per member.  Form 1065 can only be prepared using Turbotax Business (not Home & Business) which is only available as CD or download to install on your own PC, there is no Mac or online version.  

If you live in a community property state, you must file two separate schedule Cs, one for each spouse, listing half the income and half the expenses.  

[CA_Tax_Payer]

Hi - I appreciate the input from both @Opus17 and @DianeW777, but I'm still a little confused. It does seem very IRS-like to make me divide income and expenses by two and file two forms just so IRS can add them back together. And that's not to mention the trouble to figure out how to get TT to create the 4835 and two Schedules Cs instead of assuming I'm a real farmer (with self-employment tax and the like)! To be clear, I live in California (Community Property) and pay state taxes there and the farm is in Indiana (not Community Property) and was inherited (if that matters). The LLC is in Indiana for liability (not tax) purposes. I was told that a married couple LLC was treated by IRS as a "disregarded entity". The farm is operated on a "share" not a "cash rent" basis. I had a "foreign" LLC in CA but dissolved it because there was neither revenue nor expense associated to CA and the CA LLC only benefited CA (not me). Obviously I have to pay taxes in IN too. I understand the "wrong name" part of this, but I would appreciate any further guidance on how to deal with this new LLC SMLLC "disregarded entity" issue in TT H&B on Windows 10. - Thanks!

[CA_Tax_Payer]

I forgot to mention that we do not "actively participate" in daily decisions (like what fertilizer to use and when, or exactly when the crops are ready to harvest).

[Opus 17]

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@CA_Tax_Payer wrote:

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I was told that a married couple LLC was treated by IRS as a "disregarded entity".

You were told wrong.  If a married couple is in business together and the business is not registered as an LLC, it can be treated as a qualified joint venture, meaning each spouse reports half the income and expenses on a schedule C as a disregarded entity.  However, as an LLC, you must file a form 1065 partnership return unless you live in a community property state, in which case you also file 2 schedule Cs but this is not technically a "qualified joint venture", this is a special rule under Revenue Procedure 2002-69.

I think you need to see a tax professional.  There are several things here I don't know the answer to.

1. Is the farm community property?  (Given that it is out of CA, was inherited, then you formed an LLC, this may be quite complicated.)

2. Farm income goes on schedule F, not schedule C.  If it's community property, you may need two schedule Fs.  Otherwise, you likely still need to file a partnership return 1065 which can report passive as well as at-risk income.

https://www.irs.gov/businesses/small-businesses-self-employed/election-for-married-couples-unincorpo...

https://www.irs.gov/businesses/small-businesses-self-employed/married-couples-in-business