LLC converted to S-Corp is a final 568 needed

[parvitstax]

I created an LLC business as an acupuncturist  in 2022 but I had to change it to an S-Corp for 2023. Do I need to file the LLC Form 568 and mark "Final" or can I only file the S-Corp 1120S and 100S as of 2023.

Basically do I need to close the LLC in 2023 via Form 568 if it was converted to an S-Corp? 

[Terry53029]

I would only file the 1120S, and CA 100S. I don't do CA, but here is a link to CA 568 instructions

[sjrcpa]

@abctax55 , @Just-Lisa-Now- , @George4Tacks

I'll defer to you, but my thinking is this is still an LLC legally, so the 568 is still required.

Correct me if I'm wrong.

[abctax55]

WHEN did the conversion from an LLC to an S-Corp happen?

CA is going to want the final F 568 even if the LLC only existed for a portion of 2023 (and they'll want that $ 800 too).  edit... From BOTH the LLC short year AND the F 100 short year.

[abctax55]

 

 

From Spidell Message Board...

Thursday, August 03, 2023 | By: xxxxxxx 

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Since a Corp in CA doesn't pay the $800 franchise tax in its first year, is an 2016 LLC electing to be taxed as an S-Corp in 2022 exempt in the first year as an S-Corp (2022)?

Comments

Friday, August 04, 2023 | By: Anonymous

No the exemption only applies to a new business and the LLC was already in existance.

Friday, December 22, 2023 | By: Anonymous

Similar issue:  I have a single-member LLC that elected to be taxed as an S-corp mid-year 2021 so there's a Sch C for Jan-June and an S-corp for July-Dec, same EIN for the full year and the legal entity is still an LLC.  The single-member LLC paid the minimum tax in April 2021 of $800 and an LLC fee of $2,500 in June.  The FTB is saying the S-corp. owes an additional $800 min tax for the short period July-December?  Doesn't seem correct. I recognize the first year S-corp. minimum tax exemption is for new businesses only (your situation above) but this is the same ongoing business and the FTB is saying the 2021 $800 minimum tax is due for the SMLLC and again for the S-corp. for the same year.  Any guidance?

Saturday, December 23, 2023 | By: Anonymous

The FTB is correct. This is why you shouldn't change an entity in the middle of the year.

[George4Tacks]

Just to be clear - 2022 filed a Schedule C as a disregarded entity, then at some time in 2023 converted the sole proprietorship to a S-Corp. 

If that is the case I would assume Sch C for part year 2023 and a final 568 for the disregarded entity. 

I believe there should be an IRC 351 election filed with the 1040. 

[Just-Lisa-Now-]

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@sjrcpa wrote:

@abctax55 , @Just-Lisa-Now- , @George4Tacks

I'll defer to you, but my thinking is this is still an LLC legally, so the 568 is still required.

Correct me if I'm wrong.

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@sjrcpa wrote:

@abctax55 , @Just-Lisa-Now- , @George4Tacks

I'll defer to you, but my thinking is this is still an LLC legally, so the 568 is still required.

Correct me if I'm wrong.

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I dont work with SCorps very much, the only one I have, I inherited, and he's always filed the 100S, not the 568, so Im guessing he wasn't an LLC to begin with?