`
cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Returning Member

Did not properly set up the business?

Last year I bought a business that I had been working for.  Previous owners paid all the legal fees and the lawyer applied for the EIN and state license.  It was registered as an LLC with me as the sole member.  I did not file Form 8832 or 2553 (did not read further down the page except to get my EIN), so would this mean I am considered a sole proprietor and would I still need to file to be an S corp?

3 Replies
Highlighted
Expert Alumni

Did not properly set up the business?

If you (OR the previous owners!) never made the election to be taxed as a corporation or as an S Corp, then you are taxed as a sole proprietorship using Schedule C on your 1040 return.

 

You would not file an 1120S return unless you or the previous owners made the election to be taxed as an S Corp..

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Highlighted
Returning Member

Did not properly set up the business?

Just to be clear: even with a new company name and EIN, if the previous owner was set up as an S corp I would then file an 1120S

Highlighted
Expert Alumni

Did not properly set up the business?

That would be a question for the lawyer who did the sale - is this a new entity that just bought the assets of the old company and created a new company, or did the sale effectively preserve the legal status of the old company?

 

Did the previous owners file a 8832? Then this becomes something important to know.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"