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Two member LLC.....one member buys out the other.
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mmurrell
Nov 24, 2009, 12:51:42 PM11/24/09
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I have a client who has been a member in a two member LLC for a couple
of years now. He just recently (10/31/2009) bought out his partner.
There are no employees, and they have filed a form 1065 partnership
return since their inception.
of years now. He just recently (10/31/2009) bought out his partner.
There are no employees, and they have filed a form 1065 partnership
return since their inception.
The remaining member (my client) wants the LLC to continue with its
original name, and be afforded the LLC limited liability as a SMLLC.
To his clients, there world there would be no changes.
I understand the SMLLC is a disregarded entity as far as the IRS is
concerned. My client does not want to be a corporation, and would
rather file as a sole proprietorship schedule C.
What do I have to do?
Do I have to file a final 1065 and report this as a dissolution of the
partnership and claim it as a taxable transaction to my client?
mmurrell
Nov 24, 2009, 1:23:02 PM11/24/09
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To be even more specific, if I may....My client paid let say 10K for
the complete interest of his partner. His partner, and he each had a
capital account of lets say $25K. It seems to me, the partner that
got bought out has a taxable loss of $15K.
the complete interest of his partner. His partner, and he each had a
capital account of lets say $25K. It seems to me, the partner that
got bought out has a taxable loss of $15K.
Is this a taxable transaction to my client? Is there a taxable gain?
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