Similiar situation as in the Post of "Got stuck at 1065 form filing using Turbotax Business. Please help!", Dose a partnership Holding LLC has to file Wy and AR state return?g rental

[youinus2000]

9/6/24

Hi TurboTax expert,

My biz structure is the same as in the post of "Got stuck at 1065 form filing using Turbotax Business. Please help!". 

My partnership holding LLC is registered in Wy  and has subsidiary disregarded AR LLC  conducting rental biz in AR.  I am using TurboTax Biz and finished 1065 + SchK1 for Wy LLC.   From the post I do see that a disregarded Partnership LLC does not need to file state return in MD, VA; but should my Wy LLC file  Wy and AR state return?

Thank you and looking forward to hearing from you.

[tagteam]

I'm going to page Champ @Rick19744 for this. Please check back.

[Rick19744]

Your post is a little confusing as you bring in MD and VA; not sure why?

Having said that, based on the limited initial facts:

• Your LLC that is registered (and I assume organized) in WY owns a disregarded LLC.
• As a result of that structure, you only have one LLC.  The disregarded LLC is essentially treated as a division for federal income tax purposes.
• While you indicate that this is a "partnership holding LLC", you don't indicate if this is a multi-member LLC.  Based on this, I am assuming that this is a multi-member LLC; as you also indicate that you are filing a form 1065.
• AR follows federal for purposes of filing an AR LLC tax returns.  As a result, the WY LLC will need to file an AR 1050 along with the applicable state K-1.  This is due to the fact that the WY LLC is doing business in AR as a result of the rental activity.
• When filing the LLC state returns, you will need to make sure you allocate the income / loss to the appropriate state; for both WY and AR.  This will impact the filing requirements for each member (once again, assuming this is a multi-member LLC).
• I would also recommend you check with the AR secretary of state office as the LLC may have to file a franchise tax return as well.
• Finally, if you have not done so already, I would recommend discussing with legal counsel as to the need to register to do business in AR.  
• Second Finally, I would recommend you consult with a tax professional before you venture too far down the road.  Partnership tax gets complicated quickly, and having multiple state filing requirements adds to the complexity.

[youinus2000]

Thank you Rick19744 (Champ ) for the valuable input!  You are right , the Wy Holding LLC has two members ( me and my spouse) is a disregarded multi-member partnership.  The AR LLC is a disregarded but single-member LLC ( membered by Wy LLC only).  I am  forming a new disregarded Maryland LLC (also single-membered by this Wy Holding LLC) to do rental biz in Maryland. 

In the Post "Got stuck at 1065 form filing using Turbotax Business. Please help!", the TurboTax expert stated:

"The Maryland Admin Release No. 25 states that if an LLC has elected to be classified as a disregarded entity for federal income tax purposes, [it] will not have to file a separate Maryland income tax return."  so it is confirmed my Wy LLC donot need to file Maryland state return.

The AR LLC filed "Annual Franchise Tax Report" this year; does the Wy Holding LLC need to file its own "Annual Franchise Tax Report" to AR, as well?  AR LLC is the actual entity doing biz in AR, Wy LLC is just the holding entity. 

Thank you again and best regards!