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Old 09-27-2016, 02:35 PM
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I have an LLP and an LLC

I am a partner in a simple 2 person LLP. Will we file a single 1065 with 2 K-1's? Under what circumstances would we need to file a schedule E?

Once the business taxes are done, I imagine that I need to file personally my 1040 and any other associated forms. So, will I file a schedule C for my business expenses that involve only myself and not my partner (auto expenses, professional fees, meals and entertainment, etc. . . )? Along the lines of this question, I was the owner of a single member LLC for 4 months in 2016. Will I need 2 separate schedule C's then? One for my pass through income from the LLP and one for the single member LLC?

Thank you

Eric



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Old 09-27-2016, 08:12 PM
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I am a partner in a simple 2 person LLP. Will we file a single 1065 with 2 K-1's?==>correct; Technically, an LLP is not a different business structure than a standard partnership. An LLP can be a general or limited partnership, and is treated similarly for tax purposes. An LLP passes through its taxation to its partners. Each partner needs to report his share of the company?s income or loss on IRS Form 1065 Sch K/Sch K1. A limited partner, however, reports his share as passive income or loss. Passive income is not subject to self-employment tax. But any passive loss can only be deducted from other passive income or losses, and not from a limited partner?s general income.

Under what circumstances would we need to file a schedule E?===> When you earn income as a partner of an LLP, you must report your share of the business income on the Sch E. For purposes of the Sch E, the actual business the partnership engages in isn?t relevant to your obligation to prepare the schedule. Generally, you will receive a Schedule K-1 from the partnership that reports your share of income, losses and deductions. You must use the figures from the K-1 when preparing your Sch E. These items will ?flow-through? to your personal income tax return and are taxed with all other income you receive that you don?t report on Sch E.

Once the business taxes are done, I imagine that I need to file personally my 1040 and any other associated forms. So, will I file a schedule C for my business expenses that involve only myself and not my partner (auto expenses, professional fees, meals and entertainment, etc. . . )?==>
No SCh C of 1040 is needed as you are not a self employer; Schedule C is the tax form filed by most sole proprietors. as mentioned previously, you need to report your LLP income on Sch K1/Sch E or other forms and your 1040.


Along the lines of this question, I was the owner of a single member LLC for 4 months in 2016. Will I need 2 separate schedule C's then? ==>you need only one SCh C of 1040 fro the SMLLC; Then you need to file your Sch C of 1040 for the biz period of 4 months in 2016 as a sole proprietor and then you need to file form 1065/schK1/SCh E for 8 months.

One for my pass through income from the LLP and one for the single member LLC?=>as sid you need only one SChC of 1040 dor the SMLLC and need forn 1065 schK1/SCh E for the LLP



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Old 09-28-2016, 05:24 AM
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Thank you for such a thorough and excellent response. It makes complete sense to me

I'm hoping you can answer a follow up.

In Form 1065: Where do I put the LLP's business expenses such as advertising and promotion, computer and internet, liability insurance, merchant fees, office supplies, telephone expense, etc. . . . Do they all go under line 20 as "other deductions". It'd be nice if it read more like schedule C and it's categories which seem to match our expenses better.

In Schedule E: Where do I put my "personal" business expenses that I pay for personally and not through the business? For instance, my professional licensing fees, professional insurance, automobile expenses, continuing education fees, travel expenses which I paid personally and not through the business. These are all things I used to claim as a single member LLC on my schedule C. Where do I put them now? I don't see a place for them on the schedule E or anywhere on the 1065 or K-1 forms.

Thanks again for sharing your knowledge



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Old 09-28-2016, 01:03 PM
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Originally Posted by simplydone8 View Post
Thank you for such a thorough and excellent response. It makes complete sense to me

I'm hoping you can answer a follow up.

In Form 1065: Where do I put the LLP's business expenses such as advertising and promotion, computer and internet, liability insurance, merchant fees, office supplies, telephone expense, etc. . . . Do they all go under line 20 as "other deductions". It'd be nice if it read more like schedule C and it's categories which seem to match our expenses better.

In Schedule E: Where do I put my "personal" business expenses that I pay for personally and not through the business? For instance, my professional licensing fees, professional insurance, automobile expenses, continuing education fees, travel expenses which I paid personally and not through the business. These are all things I used to claim as a single member LLC on my schedule C. Where do I put them now? I don't see a place for them on the schedule E or anywhere on the 1065 or K-1 forms.

Thanks again for sharing your knowledge
In Form 1065: Where do I put the LLP's business expenses such as advertising and promotion, computer and internet, liability insurance, merchant fees, office supplies, telephone expense, etc. . . . Do they all go under line 20 as "other deductions". It'd be nice if it read more like schedule C and it's categories which seem to match our expenses better.==>Correct; TheIRS defines a business expense as any expense that is ordinary and necessary for your type of businessadvertising and promotion, computer and internet, liability insurance, merchant fees, office supplies or etc of course need to reported on f1065 line 20 as other exp;

In Schedule E: Where do I put my "personal" business expenses that I pay for personally and not through the business?=>Sorry yu can never claim your personal exp on SCh E of 1040
For instance, my professional licensing fees, professional insurance, automobile expenses, continuing education fees, travel expenses which I paid personally and not through the business. These are all things I used to claim as a single member LLC on my schedule C. Where do I put them now? I don't see a place for them on the schedule E or anywhere on the 1065 or K-1 forms.=>> those exp actually are not personal exp but they are deductible biz rlated exp; you can never claim the expenses anywhere on f1065 SCh K or SCh K-1 but Most of them are reported on F1065 line 20 as other exp also;



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Old 09-29-2016, 06:13 PM
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Thank you so much for your input! I really appreciate you sharing your expertise. I hope I can help pass on things I know to help others as well.

Aloha!



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Old 09-29-2016, 06:15 PM
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Thank you!

Thank you so much for your input! I really appreciate you sharing your expertise. I hope I can help pass on things I know to help others as well.

Aloha!



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Old 09-29-2016, 08:07 PM
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Originally Posted by simplydone8 View Post
Thank you so much for your input! I really appreciate you sharing your expertise. I hope I can help pass on things I know to help others as well.

Aloha!
thanks alot aloha~~



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