I use Lacerte. How & where in Lacerte do i report the Name & EIN of the single member LLC that is 100% owned by the partnership?Thanks

[TaxDoc]

I realize that the income, expense, gains, & losses of the single member LLC, disregarded entity are reported on the owner's tax return, in my cas a partnership. Schedule B of 1065 describes partnerships that have ownership interests in corporations, other partnerships, or trust. My partnership owns a single member LLC, disregarded entity with Name & EIN that should be reported somewhere on the owner's, partnership, tax return.

[TaxGuyBill · Accepted solution]

Nowhere.  There is no need to enter the EIN of the disregarded entity on the Partnership return.

[poolcleaner]

Bill, what about on the 1040?

[TaxGuyBill]

Personally, I don't think it is needed.  The IRS already knows the 'owner' of that disregarded entity and EIN.

An EIN for an disregarded LLC is basically only for things like employer returns, excise tax, and retirement funds.  Any 1099-MISCs (via a W-9) should be in the OWNER's EIN, not the disregarded entity's EIN.

I think the only thing the IRS uses it for is to make it easier for the IRS audit-computer to link employer returns, excise returns, and retirement funds to the Schedule C.

[poolcleaner]

The problem is that K-1s from partnerships will be in the EIN of the partnership reported to the EIN of the disregarded entity.  I have several that are done that way and have had no issues with our friends in Washington but who knows what will happen next week.
 

[TaxGuyBill]

Can you clarify your first sentence?  I'm a bit unclear what you mean.

Yes, the K-1 will have the EIN of the Partnership.  The IRS *should* know that the Partnership owns the disregarded entities, so it *should* know that any informational reporting in the disregarded entity's EIN belongs on the Partnership return.

[poolcleaner]

John Jones owns an LLC that is a disregarded entity.  That LLC is a partner in ABC partnership. John Jones LLC receives a K-1 from ABC partnership.  It is reported on the 1065 as a partner whose EIN is the EIN of John Jones LLC.  It is then shown on John Jones' Form 1040 which is in his SSN but the K-1 is reported in the EIN of John Jones LLC not his SSN.  Is the IRS going to know that the K-1 is really supposed to be reported on a 1040 because nowhere on the 1040 does the John Jones LLC EIN appear? We have shown the K-1 on the return as if it had been reported in John Jones' SSN but it is not!

[poolcleaner]

Maybe a supporting statement would be the best way to go.  What do you think?

[TaxGuyBill]

In your scenario, the K-1 *SHOULD* be issued to the John and his Social Security Number.  It is not supposed to be in the name of the disregarded entity or its EIN.  The same applies to 1099-MISCs and other informational forms.
https://www.irs.gov/instructions/i1065#idm140242267679120

Ideally, if you receive a K-1 (or 1099-MISC) in the name of the disregarded entity, it should be corrected.

I think the OP's situation is sort of the reverse.  The Partnership owns a subsidiary business (the disregarded entity).  Although it might need an EIN for non-income tax purposes (such as employer forms), for any income tax purpose it should use the EIN of the owner (in this case, the Partnership).

[poolcleaner]

Thank you, Bill.  As always.

[TaxGuyBill]

You are welcome.  :smile:

[TaxGuyBill]

You are welcome.  

Edit:. Does posting that twice mean that you are VERY welcome?  

[abctax55]

Go for three...then it would be very, very welcome :joy:

[George4Tacks]

If there is a separate filing, such as in California for the form 568, it would be shown on that form.