LLC - single member is married couple

[jlew1229]

 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 

[rbynaker]

Community property state?

See if this helps explain:

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

Rick

[BobKamman]

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.

[sjrcpa]

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

[jlew1229]

no community property state... Maine.    

[michele]

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]

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