How To Form An Llc Taxed As An S Corporation

7701 3 c 1 v c.

How to form an llc taxed as an s corporation. It is a one owner llc which is treated as a sole proprietorship. Llc taxed as s corp. To be taxed as a corporation use irs form 8832 entity classification election. Return of partnership income. Thus an llc that has been treated as a partnership for several years may be able to prospectively change its classification to be treated as a corporation by filing form 8832.

Each owner should show their pro rata share of partnership income credits and deductions on schedule k 1 1065 partner s share of income deductions credits etc. See the instructions for form 2553 pdf for all required information and to determine where to file the form. Hi thomas if after revoking the llc s s corp election you want the llc to be taxed as a c corp you don t need to file form 8832. To do this the business must file an election on form 8832 by a specific date. These entities are not required to file form 8832 entity classification election.

In order to become an s corporation the corporation must submit form 2553 election by a small business corporation signed by all the shareholders. The election to be taxed as the new entity will be in effect on the date entered on line 8 of form 8832. Then the corporation may elect s corporation status by filing form 2553 with the irs. There are two different ways you can have your llc taxed as a corporation. An llc may elect to be taxed as a corporation or as an s corporation.

Once the llc is formed choosing how your business is to be taxed is performed by filing an election document form 2553 with the irs. Multi owner llc s receive the same tax treatment as a partnership. In order for the entity to be changed from an llc to a corporation the business will need to file with the state agency who is in charge of corporate filings. An llc that is eligible to elect s status and timely files an s election form 2553 election by a small business corporation is considered to have made the election to be taxed as a corporation regs. If the llc is a partnership normal partnership tax rules will apply to the llc and it should file a form 1065 u s.

Check with your tax professional to discuss the pros and cons of this election. An llc is eligible to receive s corporation status from the irs only if. This is because of section 301 7701 3 c 1 v c of the internal revenue code. What is an llc taxed as an s corp. You can have your llc taxed as an s corporation by filing form 2553 which we ll discuss in this lesson.