Single member LLC owned by S corp

[Avs19]

Hi,

I have a client that started up a single member LLC last year that is owned solely by his S corp. All income and expenses flowed through the SMLLC. I'm assuming we just run these figures through the S corp being that the SMLLC is a disregarded entity. Does anyone know if there's a spefic form or way to notate this to the IRS on the 1120S?

Thanks!

[dkh]

This doesn't make sense.   Are you sure he didn't file an S Corp election for the SMLLC ?     Or is the SMLLC a shareholder of the SCorp?

[sjrcpa]

No form.

[sjrcpa]

@dkh 

It makes perfect sense.

[dkh]

@sjrcpa  Help me understand.    Why form an SMLLC to be owned by an SCorp ?  

[Avs19]

Are you sure he didn't file an S Corp election for the SMLLC ? Yep, that's not the case.

Or is the SMLLC a shareholder of the SCorp? Scorp is the only SMLLC member

[Avs19]

Same question I asked my client. Got a vague answer. 2022 will be the last year for both entities.

[Avs19]

So just report the SMLLC's income expenses on the Scorps 1120S? No need anything to notate to the IRS.

[dascpa · Accepted solution]

I always attach an additional statement explaining the SMLLC owned by the entity, reporting also their name and EIN.  No clue if it's ever read but never had a problem doing it this way.

[Avs19]

Great, thanks for all of your help!

[sjrcpa]

@dkh Why? You'd have to ask the client. Perhaps a separate line of business.

When i said it makes perfect sense, I meant OP's treatment.

[Avs19]

The idea was to have different operations under one parent company. The line of business is the same. Not sure what you mean by OP's treatment?

[sjrcpa]

OP = Original Poster (or Post) = you.

I meant that your treatment makes sense.

Apparently I am not making sense today.

[Avs19]

That makes sense

Thanks!