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HydroSci
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CA 568 M-1 and disregarded entity

Husband wife LLC.  We file 1065 and CA 568.  Questions:

 

TT wants the disregarded entity box checked.  Googling I see that CA is a community property state.  So do I check the disregarded entity box? My CPAs in the past did not (but I now think that is incorrect because they also told me that I am a disregarded entity).

 

Also, I can change profit percentages between years (e.g., 50/50 to 80/20 to 30/70 etc.)?  Are there any issues with doing that?  (I want to) CPAs in the past just allocated profits differently than the stated 50/50 percent, and included a statement that it was proportional share of aggregate.

 

Next, I find that CA 568 M-1 is out of balance by $800 (the amount of the LLC tax) where as the 1065 M-1 is not out of balance.   I suspect that this stems from the state tax being deductible on the 1065 and not on the 568, and the inclusion of the LLC tax on line 4b of the 568 M-1.  Thoughts on how to fix this (e.g., put -800 in 4d as a correction, or is this due to some error elsewhere)? 

 

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