Level 6

Solved

S-Corp LLC to Single Member LLC

Forum|Forum|1 year ago
December 30, 2024
4 replies
27 views

I have a client, husband and wife. A cpa friend of theirs a long time ago set them up and LLC and filed them as an S-Corp. They now want to simplify things and convert this to just a single member. How is this accomplished?

ProSeries Professional

This topic has been closed for replies.

Best answer by IRonMaN

How do you suggest I do this? Revoke the s-corp status? They still have the oil royalties and have some self employment income that will be paid to the LLC name. Can they keep the same EIN?

sorry for the questions.

Sounds like revoking the S status makes you a C corp. If there aren't any significant assets recorded in the entity, the cleanest way is to file a final S corp return and start from scratch with new entities with new EINs.

Jim-from-Ohio

Intuit Community Champion

There may be other steps but main one is to Revoke S Corp status

https://www.irs.gov/forms-pubs/revoking-a-subchapter-s-election

qbteachmt

Level 15

SMLLC with one employee on payroll? Because the S Corp should have them both on payroll, and that also means Social Security credits. When you go to a SMLLC, if they are only filing Sched C, the "other" spouse usually gets shortchanged. Are you sure they don't want Form 1065 partnership?

Don't yell at us; we're volunteers

J

judys3Author

Level 6

They have never paid payroll to themselves through the LLC and as a part of my discussion with them I had let them know that needed to have been done. Neither have gotten social security credits. I think to help them it would be easiest to and what they want to do is to not have the S-corp going forward. Most of the income for the S-Corp is oil royalties

IRonMaN

Level 15

A previous post on the issue:

https://accountants.intuit.com/community/proseries-tax-discussions/discussion/converting-an-s-corp-back-to-an-llc/00/269788

Slava Ukraini!

J

judys3Author

Level 6

Thanks IronMan. I had searched before I made the post but did not see this one.

My question in addition to this would be............there are no assets to liquidate in the S-Corp. Could they still make the election to revoke the S-Corp and become a single-member LLC? File only on Schedule E and Schedule C?

IRonMaN

Level 15

If there are no assets to liquidate, the dissolution of the S corp would be rather easy.

Slava Ukraini!

T

TaxGuyBill

Level 15

If they want to keep the existing LLC, Form 8832 (assuming they are beyond the 60-month/initial return rule).

Sign up

Login with SSO

Let's get you signed in

Login with SSO