Zeken Woozer Un-Ltd LLC
If a single-member LLC does not elect to be treated as a corporation, the LLC is a "disregarded entity," and the LLC's activities should be reflected on its owner's federal tax return. If the owner is an individual, the activities of the LLC will generally be reflected on:
- Form 1040 Schedule C, Profit or Loss from Business (Sole Proprietorship)
- Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc.
- An unincorporated business jointly owned by a married couple is generally classified as a partnership for Federal tax purposes. For tax years beginning after December 31, 2006, the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28) provides that a "qualified joint venture," whose only members are a married couple filing a joint return, can elect not to be treated as a partnership for Federal tax purposes.
- Rev. Proc. 2002-69 addressed the issue of classification for an entity that is solely owned by husband and wife as community property under laws of a state, a foreign country or possession of the United States. If there is a qualified entity owned by a husband and wife as community property owners, and they treat the entity as a: Disregarded entity for federal tax purposes, the Internal Revenue Service will accept the position that the entity is disregarded for federal tax purposes. Partnership for federal tax purposes, the Internal Revenue Service will accept the position that the entity is partnership for federal tax purposes. A change in the reporting position will be treated for federal tax purposes as a conversion of the entity. A business entity is a qualified entity if The business entity is wholly owned by a husband and wife as community property under the laws of a state, a foreign country, or possession of the United States; No person other than one or both spouses would be considered an owner for federal tax purposes; and The business entity is not treated as a corporation under IRC §310.7701-2.
- Depositing a check made payable to you, rather than the LLC, into the LLC's account can be accomplished in one of two ways. One way is to write "For Deposit Only" as the endorsement on the back of the check, along with the LLC's bank account number. This is called a restrictive endorsement that requires the check to go through the LLC's account. A second way is to write the endorsement as "Pay to..." and then insert the LLC's name. This is called a special endorsement, under which you endorse the check as you normally do for deposit into the LLC's account.