September 17, 2016

Tax Question When Forming An LLC In Nevada W/ Husband & Wife As Members

If forming an LLC in Nevada w/ husband & wife as members if we elect sub s – can IRS decide to treat as a single member LLC because we are married?

– Jerry, Georgia

Answer

You can choose either method of taxation–partnership or disregarded entity.

Use IRS Form 8832 (opens to a PDF in a new window–turn off your pop-up blockers) to elect your tax classification for your limited liability company.

If you don’t elect a specific taxation method, the IRS can/will choose one for you. That’s why it’s important to decide which you want at the beginning and make your election in writing, via the proper form.

Note: Because Nevada is a community property state, the IRS permits a husband and wife LLC to be treated as a QJV- Qualified Joint Venture. This is not so in non-community property states–husband and wife LLCs are taxed as partnerships (or corporations), but not as disregarded entities.

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