Avs19
Level 7
‎02-02-2023 10:55 AM

Hi,

I have a client that started up a single member LLC last year that is owned solely by his S corp. All income and expenses flowed through the SMLLC. I'm assuming we just run these figures through the S corp being that the SMLLC is a disregarded entity. Does anyone know if there's a spefic form or way to notate this to the IRS on the 1120S?

 

Thanks!

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dkh
Level 15
‎02-02-2023 11:15 AM

This doesn't make sense.   Are you sure he didn't file an S Corp election for the SMLLC ?     Or is the SMLLC a shareholder of the SCorp?

 

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sjrcpa
Level 15
‎02-02-2023 11:17 AM

No form.


The more I know the more I don’t know.
sjrcpa
Level 15
‎02-02-2023 11:18 AM

@dkh 

It makes perfect sense.


The more I know the more I don’t know.
dkh
Level 15
‎02-02-2023 11:24 AM

@sjrcpa  Help me understand.    Why form an SMLLC to be owned by an SCorp ?  

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Avs19
Level 7
‎02-02-2023 11:43 AM

Are you sure he didn't file an S Corp election for the SMLLC ? Yep, that's not the case.

Or is the SMLLC a shareholder of the SCorp? Scorp is the only SMLLC member

 

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Avs19
Level 7
‎02-02-2023 11:45 AM

Same question I asked my client. Got a vague answer. 2022 will be the last year for both entities.

 

Avs19
Level 7
‎02-02-2023 11:48 AM

So just report the SMLLC's income expenses on the Scorps 1120S? No need anything to notate to the IRS.

dascpa
Level 12
‎02-02-2023 11:52 AM

I always attach an additional statement explaining the SMLLC owned by the entity, reporting also their name and EIN.  No clue if it's ever read but never had a problem doing it this way.

View solution in original post

Avs19
Level 7
‎02-02-2023 11:57 AM

Great, thanks for all of your help!

sjrcpa
Level 15
‎02-02-2023 12:41 PM

@dkh Why? You'd have to ask the client. Perhaps a separate line of business.

When i said it makes perfect sense, I meant OP's treatment.


The more I know the more I don’t know.
Avs19
Level 7
‎02-02-2023 02:51 PM

The idea was to have different operations under one parent company. The line of business is the same. Not sure what you mean by OP's treatment?

 

 

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sjrcpa
Level 15
‎02-02-2023 03:39 PM

OP = Original Poster (or Post) = you.

I meant that your treatment makes sense.

Apparently I am not making sense today.


The more I know the more I don’t know.
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Avs19
Level 7
‎02-02-2023 03:42 PM

That makes sense

Thanks!