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Multiple businesses, one LLC

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starlord

Member
I have a single member LLC I started many years ago. Over the years I've started various different lines of business through the same LLC. These include:

1. Buying/selling domain names
2. An online service/web app
3. Software engineering for clients through a consulting firm as a 1099-MISC contractor

Each line of business, obviously, has different revenue and expenses. In practical terms, when I say these are "through the LLC", that simply means I use the same business bank account, registered to the LLC, for all the transactions. (Not an expert here, obviously, so possibly that's not really enough to establish that these businesses are really part of the LLC?)

Does the fact that I run these through the same LLC mean that I should report this overarching business on a single Schedule C? Or should I file a separate Schedule C for each logically independent line of business?
 


LdiJ

Senior Member
I have a single member LLC I started many years ago. Over the years I've started various different lines of business through the same LLC. These include:

1. Buying/selling domain names
2. An online service/web app
3. Software engineering for clients through a consulting firm as a 1099-MISC contractor

Each line of business, obviously, has different revenue and expenses. In practical terms, when I say these are "through the LLC", that simply means I use the same business bank account, registered to the LLC, for all the transactions. (Not an expert here, obviously, so possibly that's not really enough to establish that these businesses are really part of the LLC?)

Does the fact that I run these through the same LLC mean that I should report this overarching business on a single Schedule C? Or should I file a separate Schedule C for each logically independent line of business?
If you are running all of this through the LLC, then I would do just one Schedule C. If you end up adding another (or more) members to the LLC then you will need to file a 1065 Partnership Return (unless you elect to be treated as a S-Corp) and issue yourself (and other members if added) a Schedule K1 for the income to flow through to your personal return.
 

Taxing Matters

Overtaxed Member
If you are running all of this through the LLC, then I would do just one Schedule C. If you end up adding another (or more) members to the LLC then you will need to file a 1065 Partnership Return (unless you elect to be treated as a S-Corp) and issue yourself (and other members if added) a Schedule K1 for the income to flow through to your personal return.
I would do it differently. I would do separate Schedules C for each distinctly different business of the LLC. It's not wrong to do it on just one, but given the way the IRS analyzes returns doing separate ones may reduce audit risk a bit. Of course, doing separate Schedules C does involve a little more work, too.
 

LdiJ

Senior Member
I would do it differently. I would do separate Schedules C for each distinctly different business of the LLC. It's not wrong to do it on just one, but given the way the IRS analyzes returns doing separate ones may reduce audit risk a bit. Of course, doing separate Schedules C does involve a little more work, too.
In my experience, doing separate Schedule Cs in a circumstance like this one, tends to be the opposite of yours. I think it tends to cause more confusion on the IRS end if the EIN for the LLC is connected to multiple Schedule Cs. I went through one major audit due to that very scenario with a client. It was a three day audit. I have also seen multiple CP-2000s due to that issue as well.

One thing that I know for sure, is that if someone does decide to do multiple Schedule C's, they need to make sure that they have fully separate bookkeeping for each one, and make sure the bookkeeping is perfect.
 

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