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LLC Ownership

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What is the name of your state? TX

Let's say I have a LLC in the state A. I am forming a new LLC in state B. Can LLC A be the owner of LLC B? How the taxes would work in this situation?

Thanks
 


adjusterjack

Senior Member
Can LLC A be the owner of LLC B?
Dunno. Even if it could I don't see any advantage to doing it. You would still have to keep separate records for each business and the rates for your business insurance would be based on each business and it's possible that your insurance company won't want to combine the two businesses on to one policy.

How the taxes would work in this situation?
LLCs are disregarded entities for income tax purposes. Each business would have its own Schedule C and Schedule SE and any other forms that would apply.
 

quincy

Senior Member
What is the name of your state? TX

Let's say I have a LLC in the state A. I am forming a new LLC in state B. Can LLC A be the owner of LLC B? How the taxes would work in this situation?

Thanks
Why don’t you have an LLC A with a d/b/a B? You can have several d/b/a’s under a single LLC.
 

LdiJ

Senior Member
Dunno. Even if it could I don't see any advantage to doing it. You would still have to keep separate records for each business and the rates for your business insurance would be based on each business and it's possible that your insurance company won't want to combine the two businesses on to one policy.



LLCs are disregarded entities for income tax purposes. Each business would have its own Schedule C and Schedule SE and any other forms that would apply.
Assuming they are single member LLCs. If they are multiple member LLCs they default to a partnership.
 
Dunno. Even if it could I don't see any advantage to doing it. You would still have to keep separate records for each business and the rates for your business insurance would be based on each business and it's possible that your insurance company won't want to combine the two businesses on to one policy.

LLCs are disregarded entities for income tax purposes. Each business would have its own Schedule C and Schedule SE and any other forms that would apply.
Why don’t you have an LLC A with a d/b/a B? You can have several d/b/a’s under a single LLC.
Really trying to understand weather what I "asked" is possible or not, rather than "why don't you try this".
 

Taxing Matters

Overtaxed Member
What is the name of your state? TX

Let's say I have a LLC in the state A. I am forming a new LLC in state B. Can LLC A be the owner of LLC B?
Yes. Every state allows business entities from another state to own business entities in their state. Whether its worthwhile doing it depends on the details of your business.

How the taxes would work in this situation?
If you are the sole owner of LLC A and LLC A is the sole owner of LLC B then for federal income tax the LLCs are disregarded. If Both LLCs are in the same business then you are simply the sole proprietor of the business for federal income tax and would do a single Schedule C to report the income from them and attach that to your Form 1040. If they conduct two separate businesses then you'll be considered the sole proprietor of both businesses, and you'd do two Schedules C.

How state taxes will work will depend on the states in which the businesses are organized and, if different, the states in which they operate and are managed.
 

quincy

Senior Member
Doesn't answer my question.
Right. I was providing information for others who might happen upon your thread and be interested.

And as far as my question to you, I was curious as to why you were considering two separate LLCs. Sorry if my question offended you.
 
Yes. Every state allows business entities from another state to own business entities in their state. Whether its worthwhile doing it depends on the details of your business.



If you are the sole owner of LLC A and LLC A is the sole owner of LLC B then for federal income tax the LLCs are disregarded. If Both LLCs are in the same business then you are simply the sole proprietor of the business for federal income tax and would do a single Schedule C to report the income from them and attach that to your Form 1040. If they conduct two separate businesses then you'll be considered the sole proprietor of both businesses, and you'd do two Schedules C.

How state taxes will work will depend on the states in which the businesses are organized and, if different, the states in which they operate and are managed.
Perfectly answered to my question. Thank you so much.
 
Right. I was providing information for others who might happen upon your thread and be interested.

And as far as my question to you, I was curious as to why you were considering two separate LLCs. Sorry if my question offended you.
No apologies necessary my friend. I wonder why my clarification was taken as a 'snitty' response.
 

quincy

Senior Member
No apologies necessary my friend. I wonder why my clarification was taken as a 'snitty' response.
It sometimes can be hard to read tone in writing. :)

Taxing Matters is a tax attorney so we have come to rely on him (and on LdiJ, a tax professional) to answer questions about taxes. I am happy TM was able to answer your question perfectly.
 

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