topic Grantor's Trust owns a Single Member LLC that in turn owns Multiple Single Member LLCs in Get your taxes done using TurboTax

Grantor's Trust owns a Single Member LLC that in turn owns Multiple Single Member LLCs

Eduardohdz1 — Sat, 13 Oct 2018 14:20:41 GMT

Hello everybody.

I need help understanding how to prepare a Return for Trust/Multiple SMLs Disregarded Structure. The companies are structured as follows:

Individual formed a Grantor's Trust named "Trust"

"Trust" Owns (as a Single Member) LLC Named "A"

LLC "A" Owns (as a Single Member) Multiple LLCs named "1", "2", "3", "4"and "5"

Trust Has its own EIN Number

All SMLs have its own EIN Number

My Understanding:

Since this is a Disregarded Structure it all should be reported under the Individual's Income Tax Return. No LLC or Trust Return should be prepared.

Does the Individual do Separate Schedule C for each of the LLCs ( A,1,2,3,4,and 5 ) ?

Does the Individual do just 1 Schedule C for LLC "A" Since LLC "A" is acting as Parent for LLCs "1", "2", "3", "4" and "5" Which are considered Divisions of the Parent LLC?.

Additionally, How dos the IRS know that LLCs "1", "2", "3", "4" and "5" are Divisions of LLC "A" ?; Isn"t the IRS expecting a filing of all LLC under their Own EIN ? Is it prudent to add an statement disclosing that LLCs "1", "2", "3", "4" and "5" are all collapsing into LLC "A' Schedule C as Divisions of "A"?

Typically, Grantor Trusts do not have an EIN, this one Does and, I figure the IRS would be expecting a return filed by the Trust at the end of the year. Should the individual file a 1041 Trust Return with No Income and Expenses and adding a Statement stating that all income and expenses would be filed under the Individual's Return?

All your Help, Input and Suggestions are appreciated.

You have created a very complicated structure -- for a go...

pk — Tue, 11 Jun 2019 16:13:08 GMT

You have created a very complicated structure -- for a good reason I hope.

EINs do not mean there is a requirement to file a return or to have to distinguish the income/expense stream. You still can file schedule-Cs but the problem becomes if each of the sub-llcs do different kind of business then each would need it own schedule-C, if each has employees then you need to file the corresponding withholding reports and W-2s.

Does that help or you need more discussion ? please tell the type of business each of the subs are in ( as example ) or are they in different states ?

Re: You have created a very complicated structure -- for a go...

janetwherry — Fri, 14 Oct 2022 01:40:18 GMT

Can a grantor trust own a business and file a schedule C?