Multi-member LLC to single member LLC

[stephanie2]

I have a unique situation that I am not sure how to handle in regards to Form 1065 and members of an LLC.  This particular LLC has/had 2 members (husband & wife), which the husband passed away in July of 2020.  Does Form 1065 need to be marked as final?  Does the single member need to file Form 8832 in addition to Form 1065?

Thank you in advance for your help!

[sjrcpa · Accepted solution]

You file a 1065 for the short year ending on the death. For the rest of the year report the activity on the 1040 - Sch C, E as appropriate.

No 8832.

I tend to mark the 1065 final and attach a statement saying why. I don't know the technically correct answer.

[TaxGuyBill]

Yes, the 1065 needs to be marked as final.  As a side note, if an extension was not filed, it is probably late with fairly large penalties.

No, unless the Single Member LLC wants to be taxed as a corporation, 8832 would not be needed.

Because the 1065 is being marked as "final", it is possible that if the Single Member LLC need to use the LLC's EIN (such as for employees), they might need to contact the IRS EIN office to let them know about the situation.  But if there are no employees, excise taxes, or employer retirement plans that need the EIN of the LLC, you may just leave it or cancel the EIN.

[TaxGuyBill]

Susan is faster than me again.  I need to keep my answers shorter.   😂

[IRonMaN]

That's why I tend to go with yup or nope😀

[IRonMaN]

Unless of course your new contract with Inuit pays you by the word 🤣

[TaxGuyBill]

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@IRonMaN wrote:

Unless of course your new contract with Inuit pays you by the word 🤣

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Yeah, Intuit recently changed my contract.  They took my previous pay ($0) and prorated that now based on the number of words I type.

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@IRonMaN wrote:

 the word 🤣

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Bird is the word ....

https://www.youtube.com/watch?v=doopjZnA4MU