Final 1065 for LLC

[Linda Mathey]

I have an LLC that filed as a partnership on Form 1065. During 2007 both members sold their units to an outside party. The outside party is a corporation. Since the LLC is now a single member, they elected to file as a corporation. I assume that we file the 1065 as final using date of sale as the end of year. Since the assets are still in the LLC would our final balance sheet be the balance sheet on the date of sale? I do not think there is any reason to show distributions of property to original members because they sold their units not the assets. I think I would just show the K-1 ownership at end of yr...sale date as zero. Does this sound correct?

I have never had this situation so I am trying to determine how we report the sale of units on the 1065 or do we?? I know the gain will go on their 1040's Sch D.

Any comments are welcome. This is my year for LLC issues and there is still a month to go!

[Pacun]

I have an LLC that filed as a partnership on Form 1065. During 2007 both members sold their units to an outside party. The outside party is a corporation. Since the LLC is now a single member, they elected to file as a corporation. I assume that we file the 1065 as final using date of sale as the end of year. Since the assets are still in the LLC would our final balance sheet be the balance sheet on the date of sale? I do not think there is any reason to show distributions of property to original members because they sold their units not the assets. I think I would just show the K-1 ownership at end of yr...sale date as zero. Does this sound correct?

I have never had this situation so I am trying to determine how we report the sale of units on the 1065 or do we?? I know the gain will go on their 1040's Sch D.

Any comments are welcome. This is my year for LLC issues and there is still a month to go!

It is not clear to me if you are talking about two corporations and an ex-LLC. Please clarify.

If I understand correctly, partners sold their interests to a corporation so you have file a final 1065 and dispose all assets and reports gain on schedule D.

If one of the partners started new LLC, and wants to file as a corporation, you just need to file a first 1120.

[Linda Mathey]

It is not clear to me if you are talking about two corporations and an ex-LLC. Please clarify.

If I understand correctly, partners sold their interests to a corporation so you have file a final 1065 and dispose all assets and reports gain on schedule D.

If one of the partners started new LLC, and wants to file as a corporation, you just need to file a first 1120.

We have an LLC with 2 members. They filed as a partnership. They sold their units (shares) not their assets to a third party which is a corporation. Since a single member LLC either files a Sch C or can elect to file an 1120, the new owner has elected to file as a corporation.

The LLC is continuing but it will file a short return as a partnership up thru the date of sale and then another short return from the date of sale to the end of the year as a corporation. I was just trying to understand how the reporting would work. I presume the balance sheet as of the date of sale would be the final balance sheet for the 1065 as well as the opening balance sheet for the 1120?

Hope this is clearer...