This is
probably a situation where you would be wise to seek guidance from a
professional knowledge about mergers, who could probably structure this conversion
so that it would not be a taxable.
Obviously,
you report the Form 1065, Schedule K-1 information (from the beginning of the year
until the conversion) on you individual tax return. As far as the conversion, there
are several ways is can be accomplished
Three
types of conversion, and each has its own specific issues are:
1. Statutory conversion
2. Statutory merger
3. Non-statutory conversion
The IRS in Revenue
Ruling 84-111, briefly describes three more specific methods of
converting an LLC to a corporation when using a non-statutory conversion:
·
Direct transfer of all of
the assets of the LLC to the corporation, in exchange for all the stock of the
corporation (this could be a nontaxable conversion)
·
Transfer of the assets to
the partners, then the partners transfer the assets to the corporation (if
handles properly, this could be a tax free conversion)
·
The partners transfer their interest in
the partnership for stock of the corporation (this could be a nontaxable
conversion)
