I have a LLC and would like to set-up another owned by the first. How would the tax process work? I would appreciate any info.
2007-07-12 11:57:54 · 4 answers · asked by ...Chikita..... 1 in Business & Finance ➔ Taxes ➔ United States
My LLC is registered in Florida.
2007-07-12 11:58:42 · update #1
Will it be 100% owned by the first LLC? If so, it is a disregarded entity that does not have to file it's own return you can consolidate the activity. A single member LLC's default status with the IRS is "disregarded entity".
Edit: I just read the third answer and wanted to let you know that is not the case in Florida (since you mentioned that your LLC is a Florida LLC). Florida has no state filing requirement for an LLC. We have no franchise tax and no requirement for individual's to file a tax return so no ned for a state K-1.
2007-07-12 12:19:49 · answer #1 · answered by FlCpa 3 · 0⤊ 0⤋
Both of the prior answers are 100% correct as to the federal income tax treatment of the wholly owned subsidiary LLC. For state tax purposes you will have to file a return for the sub and pay its franchise tax if any. In California the annual franchise tax fee on an LLC run from $800 to $11,900 depending upon gross revenues.
2007-07-12 20:39:12 · answer #2 · answered by mattapan26 7 · 0⤊ 0⤋
I'm assuming you mean income taxes? An LLC is a pass-through entity, so it doesn't pay taxes. The individual members pay taxes on their pro rata share of the income. So, if you set up another LLC, that LLC will just pass through the income it generates to the second LLC, which in turn will then pass that income through to the members who will pay tax on it. Typically, if the LCC does generate income (and cash flow) it will distribute a portion to the members so that they can pay their taxes (distributions are not taxed).
2007-07-12 12:03:34 · answer #3 · answered by Al Phanti 2 · 0⤊ 0⤋
via default, B is a disregarded entity. A disregarded entity is an eligible entity that's dealt with as an entity no longer cut loose its single proprietor. Its separate existence would be disregarded for federal tax applications till it elects company tax therapy. as a result each little thing flows on the instant to A as though B did no longer exist in any respect; B does no longer document any style of tax return in any respect. Is your accountant truly an accountant?
2016-11-09 03:57:45 · answer #4 · answered by Anonymous · 0⤊ 0⤋