Who on first? 

(Sorry, an Abbott & Costello fan here.  Have to slip it in.)

First, let's straighten out the facts.  There are two possible fact patterns.  I think @George4Tacks 's solution is for Pattern II.

Pattern I:

LLC B owns 100% and is a single member of LLC A.  Therefore, 100% of LLC A's activities (real estate, you said) would be recorded in LLC B's 1065 and state return - because LLC A is a disregarded entity, being a SMLLC owned by a PASS-THRU ENTITY. 

For example, if LLC A runs a rental, its rental income and expenses would be reported on F8825 of B's F1065.  This is because A is disregarded and its activities are 100% reported in B's filing.

Now, B has filed its 1065 and whatever State return(s).  All good.  Oh chit, someone (perhaps B's tax preparer) forgot to file F568 for A to comply with A's California filing obligation as a SMLLC - again, its single member being LLC B.

Now, B is an LLC.  It has members,  X, Y, Z.  After processing its tax activities, it issues K-1 to X Y and Z. 

@ejdtaxman 's client could very well be one or all of X Y or Z....  BUT I have NO idea why @ejdtaxman  said:

a.  RE: LLC B is a multi member LLC and files a 1065. I assume what you meant is, does the owner of LLC B file a 1040, but in light of the above it should be obvious they do not. 

In the above fact pattern, X Y Z are the members of LLC B.  But WHY would it be obvious that X Y and/or Z don't file 1040???  Why would there be only one owner ("the owner) of LLC B, instead of multiple owners, unless LLC B is ALSO a single member LLC.  but in the later part of the line, "THEY" do not...  "The owner" suddenly became THEY??  

So, Joshua here may be barking up the wrong tree while chasing its own tail. 

b.  The individual involved in all of these ventures (real estate if you are curious) files a 1040 and has the K1 from LLC B on his return. 

Is "The individual" - one of X Y Z in my example?

c.  He can't put LLC A as a schedule C because LLC B is the intermediary that owns LLC A. 

Who is "He".  Who's on first??  is HE just one of X Y and Z? 

By saying LLC B is a intermediary, it seems to fit this fact pattern - A's tax activities flow to/reported by B and then passed through to X Y Z....  

Pattern II.  

LLC A is a SMLLC and its single member is Y.  Y invests in LLC B and is one of the members, but Y's ownership in LLC B is under LLC A.  K-1 (reflecting Y's ownership) is issued to LLC A because LLC A is technically on title for the ownership of LLC B.  NOW, the intermediary is more like LLC A, between Y and LLC B. 

Under Pattern II, @George4Tacks's easy peasy  solution would be THE solution.

If Pattern I is what it is, let me know.  I use Lacerte and there is a way to use LACERTE to report the 568 for an SMLLC of which the sole member is a pass-thru entity.  Lacerte does NOT offer SMLLC reporting under the S Corp or Partnership modules.  Thus SMLLC held by pass-thru entities reporting can be done only under individual. There are a few tricks.  

Sorry this gets to be so long (too long to edit.  So, if my words are confusing with typo or mix-ups, you'd have to make do).  But then, it took a whole episode but still "Who's on first?" was not cleared up.