topic My S Corp has 100% ownership of a subsidiary LLC. Do I just add the subsidiary's income/expenses to the parent company's on the 1120S or is there a form for subsidiaries? in Business & farm

My S Corp has 100% ownership of a subsidiary LLC. Do I just add the subsidiary's income/expenses to the parent company's on the 1120S or is there a form for subsidiaries?

ajmig — Wed, 05 Jun 2019 22:26:07 GMT

And for that matter, do states have their own ways of approaching this matter? I mostly would like to figure out of TurboTax has a way of noting subsidiary income/expenses or if it's just simple math.

What type of business is your S-corp? S-corp is just a ta...

AmandaR1 — Wed, 05 Jun 2019 22:26:08 GMT

What type of business is your S-corp? S-corp is just a tax category. Often people have a LLC (there's no tax LLC form) and elect to have it taxed as an S-corp. If that's the case then the S-corp represents how the LLC is taxed. In either case - I answered your question below!

When an LLC has one owner, the activity (income, expenses...

AmandaR1 — Wed, 05 Jun 2019 22:26:09 GMT

When an LLC has one owner, the activity (income, expenses, etc.) are directly reported on the owner's tax return because the LLC is 'disregarded' for taxes. There's no form to report the activity separately.

Thanks! It's an LLC taxed as an S-corp, which owns an LLC...

ajmig — Wed, 05 Jun 2019 22:26:11 GMT

Thanks! It's an LLC taxed as an S-corp, which owns an LLC. So if I understand you, I'll just add its income/expenses to the parent company's as if it were any other income source for the company.

Exactly, the LLC activity, income and expenses, can just...

AmandaR1 — Wed, 05 Jun 2019 22:26:12 GMT

Exactly, the LLC activity, income and expenses, can just be added to the 'parent' return. Sounds like you know this, but you should keep separate accounting records for the LLCs.

Awesome. I have separate company files in Quickbooks for...

ajmig — Wed, 05 Jun 2019 22:26:13 GMT

Awesome. I have separate company files in Quickbooks for each LLC and I will combine the totals in TurboTax. Thank you!

Re: Awesome. I have separate company files in Quickbooks for...

osmanpage — Mon, 10 Feb 2020 23:27:38 GMT

I would like some clarification here. Don't we need to file form 1122 if we include a subsidiary in the consolidated tax return? https://www.irs.gov/pub/irs-pdf/f1122.pdf

Re: Awesome. I have separate company files in Quickbooks for...

LindaB1993 — Tue, 11 Feb 2020 03:32:36 GMT

The Form 1122 generally applies to a C-Corporation, not an S-Corporation.

Re: When an LLC has one owner, the activity (income, expenses...

janetko22 — Sat, 29 Jan 2022 02:05:46 GMT

What about the parent having one EIN and the sub having another EIN? Where do you put the 2nd EIN in Turbotax?

Re: When an LLC has one owner, the activity (income, expenses...

RobertB4444 — Mon, 31 Jan 2022 04:14:42 GMT

The sub's EIN doesn't get entered in this case since all of the income is going to be attributed to the parent's EIN. The Sub doesn't file and doesn't need it's EIN submitted.

Re: When an LLC has one owner, the activity (income, expenses...

steven1900 — Thu, 03 Mar 2022 22:53:12 GMT

What if the sub's EIN had income reported to it on a 1099? Seems like there should be some way of reflecting that.

Re: When an LLC has one owner, the activity (income, expenses...

AliciaP1 — Fri, 04 Mar 2022 15:53:18 GMT

No, if the ownership of the subsidiary is properly reported, the subsidiary is not required to file separately or report separately. Just ensure the income reported to the sub is reflected on the parent tax returns.

Re: When an LLC has one owner, the activity (income, expenses...

Jay Vee — Mon, 07 Mar 2022 23:53:41 GMT

Hello, I need help with some information.

I own a Business/Corporation with S Corp Tax election. It is a Holding/Managing company and owns an LLC and it is the only member of the LLC.

I know that for the S Corp I need to file Form 1120s and that I will in turn receive a K1 which I will use to file schedule E on my personal 1140 tax return.

What I don't know is how do I file the LLC return?

How do I add all the LLC's income and expenses to the Parent/Holding/Managing S Corp?

Re: When an LLC has one owner, the activity (income, expenses...

AmyC — Tue, 08 Mar 2022 00:12:28 GMT

You have all the records for the LLC, income, expenses, etc. They are added in with the income and expenses of the parent. Quite literally. If the LLC has $10k income you just add it to the other income of the parent. Same with the expenses and categories.

@Jay Vee

Re: When an LLC has one owner, the activity (income, expenses...

jorgito153 — Fri, 12 Aug 2022 16:23:21 GMT

Could you Please be more specific. your answer stated that income and expenses be reported on 1120 S. how about the Schedule C or 1065 for the LLC ? Does it have to be reported with no income or expenses? if not, how does that LLC report its existence to the IRS or State? I m trying to figure this out for my knowledge purposes only. Thanks for sharing

Re: When an LLC has one owner, the activity (income, expenses...

VolvoGirl — Fri, 12 Aug 2022 16:33:10 GMT

You file a 1120 S return. Not a Schedule C nor a 1065. You need Turbo Tax Business. You will get a K-1 or W2 from the S corp return to enter into your personal return.

Turbo Tax Business is a separate program from Home & Business. It is not available to do online or on a Mac.

You can buy the Window's version here…..

https://turbotax.intuit.com/small-business-taxes

Re: When an LLC has one owner, the activity (income, expenses...

Anonymous_ — Fri, 12 Aug 2022 16:37:49 GMT

@jorgito153 wrote:

.....answer stated that income and expenses be reported on 1120 S. how about the Schedule C or 1065 for the LLC ? Does it have to be reported with no income or expenses?

S corporations, and LLCs electing to be treated as S corporations for federal income tax purposes, file Form 1120-S.

Single-member LLCs are disregarded entities and report income and expenses on Schedule C.

Multi-member LLCs are treated as partnerships by default and report on Form 1065 (and issue K-1s to their members).

S corporations must file Form 1120-S whether or not they have income or expenses.

Multi-member LLCs must file Form 1065 unless they have neither income nor expenses for the tax year.

Single-member LLCs (and sole proprietorships) file Schedule C unless they have neither income nor expenses.

Re: When an LLC has one owner, the activity (income, expenses...

Mike9241 — Fri, 12 Aug 2022 16:48:54 GMT

If you are asking about a single-member LLC owned by an S-Corp. pretend the LLC doesn't exist (there isn't any return for a single member LLC unless it elects to be taxed as other than a disregarded entity at least at the federal level) and prepare the S-Corp as if there was no LLC

however, if the LLC has made its own S-corp election complication arise. see this thread

https://ttlc.intuit.com/community/business-taxes/discussion/our-company-is-a-s-corp-we-have-100-interest-in-another-s-corp-does-that-company-file-a-return-and/00/369204#:~:text=The%20parent%20S%20corporation%20needs%20to%20make%20a,the%20filing%20deadline%20%28see%20below%20for%20further%20discussion%29.

Re: When an LLC has one owner, the activity (income, expenses...

Jac123 — Thu, 09 Feb 2023 20:13:51 GMT

@AmyC
After reading the full conversation I understood that when an S- Corp owns an LLC (Parent-holding company), the LLC income is reported on other income/expenses, so in that case the sub-LLC's EIN is not reported to the IRS at all.

Does this make any sense?

Re: When an LLC has one owner, the activity (income, expenses...

RobertB4444 — Thu, 09 Feb 2023 20:45:59 GMT

That is correct. Their income is just reported as part of the parent company.

@Jac123