How To Form An Llc Taxed As An S Corporation

You can have your llc taxed as a c corporation by filing form 8832.

How to form an llc taxed as an s corporation. Each owner should show their pro rata share of partnership income credits and deductions on schedule k 1 1065 partner s share of income deductions credits etc. The election to be taxed as the new entity will be in effect on the date entered on line 8 of form 8832. To do this the business must file an election on form 8832 by a specific date. An llc is eligible to receive s corporation status from the irs only if. An llc may elect to be taxed as a corporation or as an s corporation.

If the llc is a partnership normal partnership tax rules will apply to the llc and it should file a form 1065 u s. See the instructions for form 2553 pdf for all required information and to determine where to file the form. In order to become an s corporation the corporation must submit form 2553 election by a small business corporation signed by all the shareholders. Hi thomas if after revoking the llc s s corp election you want the llc to be taxed as a c corp you don t need to file form 8832. What is an llc taxed as an s corp.

These entities are not required to file form 8832 entity classification election. This is because of section 301 7701 3 c 1 v c of the internal revenue code. An llc that is eligible to elect s status and timely files an s election form 2553 election by a small business corporation is considered to have made the election to be taxed as a corporation regs. To be treated as an s corporation by the irs an llc must complete and file form 2553. It is a one owner llc which is treated as a sole proprietorship.

7701 3 c 1 v c. Meaning when an llc files form 2553 it s as if the llc files form 8832 electing c corp and then subsequently files form 2553. There are two different ways you can have your llc taxed as a corporation. Then the corporation may elect s corporation status by filing form 2553 with the irs. Thus an llc that has been treated as a partnership for several years may be able to prospectively change its classification to be treated as a corporation by filing form 8832.

In order for the entity to be changed from an llc to a corporation the business will need to file with the state agency who is in charge of corporate filings. Check with your tax professional to discuss the pros and cons of this election. Multi owner llc s receive the same tax treatment as a partnership. You can have your llc taxed as an s corporation by filing form 2553 which we ll discuss in this lesson. To be taxed as a corporation use irs form 8832 entity classification election.