I received 1099-B REGULATED FUTURES CONTRACTS for my LLC. What is the best place to fill this? Is it 1256 CONTRACTS & STRADDLES? I want to avoid SE taxes also.

[Coleen3]

Edited 2/14/18

Definition of a Qualified Joint Venture

A qualified joint venture is a joint venture that conducts a trade or business where (1) the only members of the joint venture are a married couple who file a joint return, (2) both spouses materially participate in the trade or business, and (3) both spouses elect not to be treated as a partnership. A qualified joint venture, for purposes of this provision, includes only businesses that are owned and operated by spouses as co-owners, and not in the name of a state law entity (including a limited partnership or limited liability company) (See below). Note also that mere joint ownership of property that is not a trade or business does not qualify for the election. The spouses must share the items of income, gain, loss, deduction, and credit in accordance with each spouse's interest in the business. The meaning of “material participation” is the same as under the passive activity loss rules in section 469(h) and the corresponding regulations (see Publication 925, Passive Activity and At-Risk Rules). Note that, except as provided in section 469(c)(7), rental real estate income or loss generally is passive under section 469, even if the material participation rules are satisfied, and filing as a qualified joint venture will not alter the character of passive income or loss.

Below are the steps to enter the Regulated Futures Contracts and Options 1099-B information in TurboTax:

• Click on the Federal Taxes tab
• Select the Wages and Income tab
• Select  the EXPLORE ON MY OWN option (this may require you to click through one or two other screens beforehand)
• Scroll down to the  Investment Income subgroup
• Next the Contracts and Straddles line, and click the start button
• Answer YES that you had Sec. 1256 contracts
• Don't make any special elections selections unless they apply to you
• On the Contracts and Straddles page, choose the box next to the Sec. 1256 Contracts marked-to-market
• Click continue, and from there TurboTax will take you through the necessary questions and answers tree

[sismaxis]

Even if it is for LLC? I thought only personal goes to 1256

[Coleen3]

How is your LLC set up taxwise? One person LLC defaults to Sole Prop. Two person to Partnership. You have to elect S-Corp status. You are in the SE Edition. Sole Prop is personal, even if an LLC.

[sismaxis]

It set as a multi-member LLC, currently me and my wife. I did NOT elect to classify as corporation.

[Coleen3]

Refer back to the original post regarding the inability to have a multi-member LLC and still be able to file Sch C. You will need to fill out a Partnership return and carry to Schedule E. In this way, you can achieve your end in not paying SE tax. It goes on a 1065 --> k1 --> E

[sismaxis]

How I can do that? What is particular section for that?

[Coleen3]

You need the Business Desktop Edition. <a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/small-business-taxes/">https://turbotax.intuit.com/small-business-taxes/...>

[Mimi1]

Hi there. I was hoping to piggyback on this question.  I have a single member LLC and I received a 1099-B for futures contracts losses. Do I enter as normal in the contracts and saddles section and will it carry over to the schedule C?

[DaveF1006]

To clarify, was the 1099 B issued in your name and SSN, or the Business name with a separate EIN?

[Mimi1]

I have both, one is under my name and SSN  (same as prior tax year) and the other is under the LLC and EIN. Mid year I formed the LLC (single member) and used it for trading. I am familiar with how to report it for my personal 1099B but wasn’t sure about the LLC.

[DianeW777]

Since you are a single member LLC (SMLLC) you will add both 1099-Bs on your personal return as a sole proprietor.  If you want to be sure the income is tracked for IRS purposes you can use the nominee process to move the one under your EIN to your social security number (SSN).  Follow the steps below.

Nominee returns. 

Generally, if you receive a Form 1099 for amounts that actually belong to another person or entity, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received).  You must also furnish a Form 1099 to each of the other owners. 

File the new Form 1099 with Form 1096 (this is a transmittal for the 1099) by mailing to the Internal Revenue Service Center for your area. (Provided on the Form 1096)

• On each new Form 1099, list your LLC as the payer and the you as the recipient. On Form 1096, list your LLC as the nominee filer, not the original payer.  The nominee is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner (you in this case).

The forms filed with the IRS should be the red copy so if you don't have a color printer, go to the IRS website and order the forms: 

• Form 1096 Transmittal 
• Form 1099-B

@Mimi1 

[Mimi1]

This is great information, thank you so much. Is this the sane for a loss? I didn’t make a profit last year so my 1099-B only shows a loss.

[AbrahamT]

Yes, absolutely. You would enter the information for a loss just as you would for a gain.