David Posted February 26, 2016 Report Share Posted February 26, 2016 H & W business owners filed Sch C for their business in their 2014 tax return. 2014 was the first year for their business. The Sch C listed only the H as the owner. TPs intended to be a partnership and didn't realize the tax return filed for them treated the business as a SMLLC. I am preparing their 2015 tax return. I think I can file a 8832 for them to be taxed as a mulit member LLC retroactively back to 1/1/15. But I don't think they can get late election relief for 2014, their first year in business. Even though the 8832 is being filed within 3 years and 75 days, doesn't the fact that they already filed their 2014 tax return disqualifiy them from being able to amend and file a 1065 for 2014? Has anyone had this situation before? Were you successful getting everything amended and filing a 1065 back to the beginning year of the business? Or can I only file the 1065 for 2015? Also, what usually flies as far as the reason the 8832 wasn't timely filed? Thanks. Quote Link to comment Share on other sites More sharing options...
BHoffman Posted February 27, 2016 Report Share Posted February 27, 2016 I saw this post earlier and have thought about it. You need to look at the Articles of Organization for the LLC and see whether H is the only member, or if W is also listed. If H is the only member of the LLC, then Sch C is correct. He cannot elect to be taxed as a partnership unless there is another member legally added to the LLC. If H and W are listed as members of the LLC, then you can amend 2014 to remove Sch C and report on form 1065. If they are both active in the business, I don't think the tax will change. That's my two cents, and I'm giving you a bump 2 Quote Link to comment Share on other sites More sharing options...
BHoffman Posted February 27, 2016 Report Share Posted February 27, 2016 Also, there is no need to file form 8832 in any event since a MMLLC defaults to partnership treatment. 4 Quote Link to comment Share on other sites More sharing options...
David Posted March 2, 2016 Author Report Share Posted March 2, 2016 Thanks for your help. The articles of organization for Colorado only ask if there are one or more members. It doesn't list names. So a single or multi-member LLC would check this box. I always thought it was strange to have that question since all LLCs would check the box. Quote Link to comment Share on other sites More sharing options...
BHoffman Posted March 2, 2016 Report Share Posted March 2, 2016 Hi David - Still no 8832. I think my advice above would still hold, and it sounds like they can choose. Good luck! Quote Link to comment Share on other sites More sharing options...
SFA Posted March 3, 2016 Report Share Posted March 3, 2016 What about the late filing penalty for the partnership returns? Quote Link to comment Share on other sites More sharing options...
BHoffman Posted March 3, 2016 Report Share Posted March 3, 2016 Rev. Proc. 84-35 or ask for the first time abatement. Quote Link to comment Share on other sites More sharing options...
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