passthrough LLC taxes (NY)

also - i just found a piece of paper from the irs saying i have to file a 1065 by june, though a 941 is due by april 30 (quarterly return)

and one other thing ... i never sent in the affidavits i paid for from the newspapers ...

this might sound like a legal question instead of a tax one, but: if i'm required to submit those affidavits in order to have a duly-formed LLC, and i don't, then do i not have an LLC, such that if i don't send in those affidavits i can forget the whole thing? not be the owner of a derelict LLC and not have to fill out any forms and not have to pay any taxes on a company that doesn't exist?

You formed a corporation or LLC, right? In that case, the corporation should file a form 1120 (C Corp) or 1120-S (S Corp). An S corp would issue a Schedule K1 to each of the shareholders. If each of you owned

Not for federal. But state may have income. CA for example has a minimum tax of $800 except for the first year (maybe first 2 years, but I'll have to check on that). Check with NY. Maybe someone else will write.

One more thing. That 1k may also be deductible. If you used it to pay for meals, then that might raise eyebrows. What kind of stuff was it? If it was supplies that you now use for personal use (like stamps, plain stationary) then no deduction. And fees you pay an accountant to do your 1120* would also be deductible.

actually it was an LLC, and i understood that we could count the LLC as a passthrough entity for tax purposes

alright, will look into that

responding to you other post:

he spent that cash, probably $1k, on computer equipment/services that is not used for personal use (ever)

he actually just called me and said his accountant told him that since we aren't actually in business (yet?), the money he spent counts as an investment and not an expense, and thus is not deductible?

this is getting more and more confusing

CA for example has a

I am not aware of an exception for the first year or two for CA LLCs. Any further thoughts on this?

On Apr 8, 11:13 am, "Gil Faver"

The California minimum tax rules are different for corporations than for LLCs, LLPs and LPs. A corporation is not subject to the $800 minimum tax for its first taxable year of existence (which in some cases is a short year).

An LLC, LLP, LP, QSUB, REIT, RIC, REMIC, FASIT, etc. is subject to the $800 minimum tax from the beginning.

See CRTC Sec. 23153(f), effective for corporations organized on or after January 1, 2000.

Katie in San Diego

Oops, I was dutifully editing out the underbrush and managed to push the "send" button by mistake. Maybe Dick will see the blank post and delete it. Someday .

The money you spent sounds like organization costs. The LLC can elect to amortize those costs over 60 months, on a timely filed return. I believe the election has to be made at the entity level, although I'm not certain of that. If the election is not made, those costs will never be deductible until the LLC is dissolved.

The money your associate spent sounds as though it was partly for equipment and partly for services. The equipment is a capital asset of the LLC and must be capitalized and depreciated, beginning at the point when it is placed in service, i.e., when business commences. The services are probably start-up costs, which you may be able to deduct currently.

The LLC must file a partnership return (Form 1065) and give each of you a Schedule K-1 that will tell you what expenses, if any, are passed through as currently deductible losses. You have to divide all of these items up in accordance with the LLC's operating agreement, not in accordance with who paid what.

I would suggest that you and your associate hire his accountant to handle this for you, since he or she is already familiar with the facts. He or she can also advise you on how to handle all of these matters if it is the case that the LLC is not now intended ever to engage in any business activities. You can't do this by yourself.

Katie in San Diego