Hello Amy,
Thank you for your detailed response!
I do have a couple of follow-up questions in regards to filing for our LLC partnership, especially after reading the Legalzoom article as shown below - "Filing Requirements for an LLC Partnership":
1) They do not mention a Schedule K, but do mention a 1065 tax form. Are both of these required?
2) Could we classify ourselves as an LLC without business activity in 2022, and thus our LLC partnership does not have to file a partnership tax return for 2022? Our LLC has not received any income for 2022, as that will only come with the sale of the spec house sometime in 2023. In terms of expenses, do either of these activities count as expenses that should be claimed in the 2022 year: 1) members of the LLC contributed 20% cash for the construction loan down payment - around $400,000, 2) the construction loan, in which my wife and I are guarantors on the note, purchased the property for $790,000, and the loan has paid for approximately $700,000 in construction costs. In the context of having an LLC partnership setup to specifically build/sell a single spec house, does it even make sense to claim these items as expenses in the 2022 year (if these are indeed seen as expense items), when the house will not be sold for a financial gain until sometime in 2023?
Please let me know your thoughts.
Thanks so much!
Jamie
Filing Requirements for an LLC Partnership
An LLC that is taxed as a partnership is subject to the same federal income tax return filing requirements as any other partnership. The LLC must file an informational partnership tax return on tax form 1065 unless it did not receive any income during the year AND did not have any expenses that it will claim as deductions or credits.
Thus, an LLC with no business activity that is taxed as a partnership is not required to file a partnership tax return unless there are expenses or credits that the LLC wants to claim.
