How To Form An Llc Taxed As An S Corporation

An llc is eligible to receive s corporation status from the irs only if.

How to form an llc taxed as an s corporation. Multi owner llc s receive the same tax treatment as a partnership. What is an llc taxed as an s corp. 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. Check with your tax professional to discuss the pros and cons of this election. The election to be taxed as the new entity will be in effect on the date entered on line 8 of form 8832.

These entities are not required to file form 8832 entity classification election. An llc is not a corporation even if the irs recognizes it as an s corporation for tax purposes. In order to become an s corporation the corporation must submit form 2553 election by a small business corporation signed by all the shareholders. Llc taxed as s corp. This is because of section 301 7701 3 c 1 v c of the internal revenue code.

An llc may elect to be taxed as a corporation or as an s corporation. 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. 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. Meaning when an llc files form 2553 it s as if the llc files form 8832 electing c corp and then subsequently files form 2553. 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.

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. Then the corporation may elect s corporation status by filing form 2553 with the irs. If the llc is a partnership normal partnership tax rules will apply to the llc and it should file a form 1065 u s. You can have your llc taxed as a c corporation by filing form 8832. To do this the business must file an election on form 8832 by a specific date.

To be treated as an s corporation by the irs an llc must complete and file form 2553. 7701 3 c 1 v c. In order to be taxed as an s corporation the llc must file form 2553. 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. It is a one owner llc which is treated as a sole proprietorship.