Husband & Wife Owed Business As An LLC

In states that are not community property states (e.g. New Hampshire, Vermont and Massachusetts) if an unincorporated business is owned by a husband and wife, but is also an LLC, they should file the tax return for the business on a partnership tax return. If this is not done, the IRS can assert that a proper return was never filed, and so the statute of limitations on their ability to examine the return will not begin.

In states that are community property states the business activity of an unincorporated husband and wife owned business should be split between them in proportion to their ownership interests and reported on two Schedule C’s. This is the case regardless of the business being an LLC.

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