Husband-Wife Business

In 2012, husband and wife created an LLC in Oklahoma. Husband and wife file a joint return. Wife has substantial, 6-figure W-2 income; husband is self employed consultant with little additional income.

I have previously prepared a Schedule C for a single owner LLC but am not sure of the treatment in this case. I am not familiar with Form 1065, but know there may be an option to declare this to be a qualified joint venture and file separate Schedule Cs for husband and wife, dividing income and expenses proportionately.

The company is divided as 51% for the husband and 49% for the wife. In 2012 the company had only $2,000 in expenses and no revenue.

If available as an option, I would obviously prefer to be able to include a couple of Schedule Cs with their joint tax return, rather than prepare a separate Form 1065 and two Schedule K-1s.

Reply to
Michael Bratt
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In 2012, husband and wife created an LLC in Oklahoma. Husband and wife file a joint return. Wife has substantial, 6-figure W-2 income; husband is self employed consultant with little additional income.

I have previously prepared a Schedule C for a single owner LLC but am not sure of the treatment in this case. I am not familiar with Form 1065, but know there may be an option to declare this to be a qualified joint venture and file separate Schedule Cs for husband and wife, dividing income and expenses proportionately.

The company is divided as 51% for the husband and 49% for the wife. In 2012 the company had only $2,000 in expenses and no revenue.

If available as an option, I would obviously prefer to be able to include a couple of Schedule Cs with their joint tax return, rather than prepare a separate Form 1065 and two Schedule K-1s.

Reply to
Michael Bratt

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A business owned and operated by the spouses through a limited liability company does not qualify for the election

Only businesses that are owned and operated by spouses as co-owners (and not in the name of a state law entity) qualify for the election. See Rev. Proc.

2002-69, 2002-2 C.B. 831, for special rules applicable to husband and wife state law entities in community property states.

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