|

Form is Critical: IRS Cuts Down Broker’s FICA S Corp Planning

Takeaway: While S corporations can be an effective means to reduce FICA taxes, the form of the arrangement must be consistent with the taxpayer’s intended reporting position(s). The S corporation, not the S corporation’s employee-shareholder, must be in control of the receipt of income in order shift income from the shareholder’s personal income tax return…

Easy, Partner: Becoming a Tax Partnership by Adding a New Member to a Single Member LLC
|

Easy, Partner: Becoming a Tax Partnership by Adding a New Member to a Single Member LLC

This post is a primer on the federal income tax effects of adding a new member to a limited liability company (“LLC”) that goes from a single member limited liability company (“SMLLC”) to a two member LLC.  These effects include the conversion of the LLC being treated as a disregarded entity (“DRE”) to a partnership…