Accountant-Man
Level 13
01-28-2025
04:03 PM
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Do you mean "yes, and LLC with two members" who filed as a partnership?
"Yes, a partnership can convert to a corporation. The process can involve changing the partnership's tax status or merging the partnership into a corporation.
How to convert a partnership to a corporation
- File IRS Form 8832: This form changes the tax status of an LLC from a partnership to a C corporation.
- File IRS Form 2553: This form changes the tax status of an LLC from a partnership to an S corporation.
- Merge with a corporation: The partnership can merge with a newly formed corporation.
- Contribute assets to a corporation: The partnership can contribute its assets to a newly formed corporation.
- Elect to be taxed as a corporation: The partnership can elect to be taxed as a corporation for income tax purposes.
Factors to consider
- The method chosen can affect the corporation's and stockholders' tax basis, holding period, and other collateral tax aspects.
- The change in tax status requires the recognition of deferred tax assets and liabilities.
- The initial recognition is recorded in income from continuing operations.
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