I definitely agree with @Critter-3 in that you need to seek some professional tax advice where you can have a one on one discussion of your goals.
Having said that, your one on one discussion with a tax professional will provide you with some guidance as based on your current facts, you are off track.
- Based on your current facts, you don't have a structure that will require or allow a consolidated tax return.
- Your holding company, a SMLLC, is a disregarded entity, and as such, will be reported directly on your tax return.
- If you want to set up a C corporation, you can do that, but using your SMLLC will be treated as if you owned it directly; sole shareholder.
- The C corporation can certainly have a SMLLC, but this is once again treated as a disregarded entity and will essentially be treated as a division on the C corporation tax return. This SMLLC is not a subsidiary since it is disregarded.
- So at the end of the day, based on your current facts, you will have:
- A C corporation that owns a SMLLC that is disregarded and will be treated as a division. So all earnings of this SMLLC will be reported on the C corporation tax return; form 1120.
- You will be the sole shareholder of the C corporation. There will be nothing to report from the C corporation since it is a separate tax paying entity and all the tax will be paid at the C corporation level.
- You will have taxable income should the C corporation pay out a dividend. Paying out a dividend will require understanding the computation of earnings and profits which is not the same as retained earnings.
Once again, get some professional guidance.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
