Hello everybody.
I need help understanding how to prepare a Return for Trust/Multiple SMLs Disregarded Structure. The companies are structured as follows:
Individual formed a Grantor's Trust named "Trust"
"Trust" Owns (as a Single Member) LLC Named "A"
LLC "A" Owns (as a Single Member) Multiple LLCs named "1", "2", "3", "4"and "5"
Trust Has its own EIN Number
All SMLs have its own EIN Number
My Understanding:
Since this is a Disregarded Structure it all should be reported under the Individual's Income Tax Return. No LLC or Trust Return should be prepared.
Does the Individual do Separate Schedule C for each of the LLCs ( A,1,2,3,4,and 5 ) ?
Does the Individual do just 1 Schedule C for LLC "A" Since LLC "A" is acting as Parent for LLCs "1", "2", "3", "4" and "5" Which are considered Divisions of the Parent LLC?.
Additionally, How dos the IRS know that LLCs "1", "2", "3", "4" and "5" are Divisions of LLC "A" ?; Isn"t the IRS expecting a filing of all LLC under their Own EIN ? Is it prudent to add an statement disclosing that LLCs "1", "2", "3", "4" and "5" are all collapsing into LLC "A' Schedule C as Divisions of "A"?
Typically, Grantor Trusts do not have an EIN, this one Does and, I figure the IRS would be expecting a return filed by the Trust at the end of the year. Should the individual file a 1041 Trust Return with No Income and Expenses and adding a Statement stating that all income and expenses would be filed under the Individual's Return?
All your Help, Input and Suggestions are appreciated.
