Level 3

Question

Changing of Partnership to a Corporation

12 replies
202 views

My client wants to convert his partnership (Formed in 2022) No income for 23 and 22 and only 10k in basis to an S corp I trying to get some advice as to how we can do that > My understanding is that we have to do a 351 election of which I am not familiar with...Can I file a form 8832 to make this election and DO i have to get a new EIN number for the corporation ... any thoughts will be appreciated

ProSeries Professional

This topic has been closed for replies.

sjrcpa

Level 15

Is this "partnership" actually an LLC?

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

R

RP62_2Author

Level 3

yes two partners

Jim-from-Ohio

Intuit Community Champion

2553, no new EIN (edited)

T

TaxGuyBill

@RP62_2 wrote:

My client wants to convert

... any thoughts will be appreciated

Make sure that it is an 'informed' want.

Have you discussed the pros and cons of the election with him, as well as the changes/additional things that need to be done for a corporation?

R

RP62_2Author

Level 3

Yes I did and he wants to convert

qbteachmt

Level 15

If they're not making money, it's going to be hard to comply with the payroll requirement.

Don't yell at us; we're volunteers

Accountant-Man

Level 13

There are differences between a partnership filing a 1065 and a multi-member LLC filing as a partnership filing a 1065. They are not the same.

A muti-member LLC chooses or elects to file a 1065. They could elect to file 1120 or 1120S. A partnership must file a 1065.

** I am "Elevating with Intention!"

Accountant-Man

Level 13

"Yes, an LLC filing as a partnership can convert to a corporation by filing IRS Form 8832. This change in tax status allows the LLC to be taxed as a corporation without changing its legal form.

How to convert an LLC to a corporation

File IRS Form 8832 to elect to be taxed as a corporation
Approve a plan of conversion that includes the terms and conditions of the conversion
Obtain the approval of the members of the LLC
File a certificate of merger and any other required documents with the state

Why convert an LLC to a corporation?

Tax status: Converting to a corporation can change the tax status of the LLC
Raising venture capital: Venture capital funds often prefer to invest in corporations over LLCs
Corporate law: Corporate law provides a well-established framework for management and fiduciary duties

What to consider when converting an LLC to a corporation?

The rules for converting an LLC to a corporation vary by state
The conversion can have significant tax implications
It's a good idea to consult with a business professional

** I am "Elevating with Intention!"

Sign up

Login with SSO

Let's get you signed in

Login with SSO