LLC - single member is married couple

Forum|Forum|3 years ago
October 25, 2022
3 replies
17 views

I have a client whose lawyer set up a single member LLC for their rental property. The LLC agreement states the sole member is the husband and wife. From what I have researched, if a married couple owns an LLC, a partnership return would need to be filed. The client is of the understanding that the lawyer set it up in such a way so the partnership return would not have to be filed.

The EIN letter from the IRS states single member, but I am guessing this was because the law office clicked that when they applied for the EIN. I asked for the agreement. The agreement say the single member is Mr & Mrs., jointly 100%.

Am I correct, that a partnership return will be required, or is the way the lawyer set this up, allow them to file a Schedule E on the personal return?

Thank you in advance

Lacerte Tax

This topic has been closed for replies.

rbynaker

Level 13

Community property state?

See if this helps explain:

https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-companies

Rick

sjrcpa

Level 15

Or if they own it as tenants by the entirety, that is one owner, too.

The more I know the more I don’t know.

BobKamman

Level 15

Ephesians 5:31

31 For this cause shall a man leave his father and mother, and shall be joined unto his wife, and they two shall be one* flesh.

M

michele

Level 6

They can choose to each report 1/2 on schedule e's and not prepare a partnership return even if it is not a community property state. I believe if you have under ten members you can choose not to do a partnership but you have to be sure each member is reporting their share. I just always hate dividing it up as far as basis and depreciation but we have a few that do that and even some that are not married

but own property together.

Michele

sjrcpa

Level 15

Not if it's an LLC. That doesn't fit the definition of Qualified Joint Venture.

The more I know the more I don’t know.

Ephesians 5:31

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