Thank you for your reply. Two questions/comments:
1) You mention IRS rules against going back and forth assigning an owner. Could you please point me to these rules?
2) What do you make of the following (found this after my first post):
"IRS Revenue Procedure 2002-69 stipulates that the IRS will respect your treatment of an unincorporated husband-wife business in a community property state [which is true in our case] as either
1. a sole proprietorship operated by one of the spouses, which would include a single-member LLC treated as a sole proprietorship for tax purposes, or
2. a husband-wife partnership, which would include a husband-wife LLC treated as a husband-wife partnership.
Put another way, in a community property state, you and your spouse can choose to treat your unincorporated husband-wife business as a sole proprietorship operated by one spouse for federal tax purposes. The IRS will never object, even when both you and your spouse are very active in the business."
(source: https://bradfordtaxinstitute.com/Content/Husband-Wife-Partnerships-Three-Tax-Saving-Strategies-Part-...)
This, it seems to me, would mean that you can treat a husband-wife LLC as a SMLLC/sole proprietorship in a community property state (i.e. file 1 Schedule C, 1 Schedule SE). In TT, that would mean to aggregate the SE profits from my and my wife's business activities in 1 Schedule C (which is assigned to either me or my wife as the "sole proprietor") which in TT then generates 1 Schedule SE (with all SE income assigned to either me or my wife for SE tax purposes).
The switching back-and-forth may not be possible (please provide source), but ultimately this (and the associated SE tax/social security effects) does not matter that much in a community property state anyway. Key for me is having 1 Schedule C with aggregated SE income to be able to deduct all healthcare premia rather than only part when incomes are split on 2 separate Schedule Cs.
Thank you!
