Schedule C rules: Changed from LLC to Sole Proprietorship Mid-year

[louckellyg]

I had a single-member LLC that I "closed" with my state's secretary of state's office mid-year and immediately began operating the same business as a Sole Proprietorship. Both businesses have the same name but separate EINs and no employees. Do I need to file a separate Schedule C for each business for 2024? I've seen the posts that explained if the situation were reversed (SP closes and restarts as a single-member LLC), only one Sch C is required. Is that true in my case?

Thanks 

[guywong]

I don't know the answer to your question for sure.  But off the top of my head, since you operated the LLC with a different FEIN than your sole proprietorship, my recommendation is to file two different Schedules C.  This should prevent the IRS from sending you a CP-2000 letter down the road due to mismatch of 1099-NEC and 1099-MISC you may have received under the other FEIN.   There is no harm in filing two Schedules C.  If you don't have accurate breakdown of expenses, I would just use a reasonable allocation between the two Schedule C.  Since it doesn't change the tax liabilities, the IRS shouldn't care.  IRS agents I've dealt with are quite reasonable.

[dmertz]

I agree with guywong.  If you have a separate EIN for each business, I would treat each as a separate business with a separate Schedule C since the IRS instructions for Schedule C indicate that you are to show the corresponding EIN on Schedule C.  For tax purposes, TurboTax will combine the results.  The result will be the same as if you entered everything as if it was a single business with a single Schedule C.