Call: 301.296.4445

How are multi-member LLCs treated for federal income tax purposes?

 

A:

As a default rule, multiple member LLCs file tax returns in the same manner as a partnership. A partnership pays income tax by filing an information return with the IRS and the individual partners file a Schedule K-1 on their individual tax returns to show their percentage of the profits/losses of the partnership.
Here is the process:
First, the partnership files an information-only return on Form 1065 and submits it to the IRS; and
Then each partner's share of the profit or loss of the partnership is recorded on a Schedule K-1.
The K-1 information for each partner is reported on Line 17 of the partner's Form 1040.




The Kramer Law Firm LLC represents small business clients throughout Washington, D.C. and Montgomery and Prince George's Counties in Maryland, including the communities of Bethesda, Bowie, Chevy Chase, Gaithersburg, Germantown, Laurel, Potomac, Rockville and Silver Spring and all of the surrounding areas.


TERMS OF USE


The information provided in The Kramer Law Firm web site is offered purely for informational purposes. It is not intended to create or promote an attorney-client relationship, and does not constitute and should not be relied upon as legal advice. We intend to make every attempt to keep this information current. We do not promise or guarantee, however, that the information is correct, complete or up-to-date, and online readers should not act based upon this information without seeking professional counsel from an attorney admitted to practice in your jurisdiction.
 
Transmission of information from The Kramer Law Firm web site is not intended to create, and its receipt does not constitute, an attorney-client relationship with The Kramer Law Firm or any of its individual attorneys or personnel. If you elect to communicate with the firm through this web site, do not transmit any information about any matter (and particularly not any confidential information) that may involve you until The Kramer Law Firm LLC has agreed to represent you, and you have received confirmation of that fact in the form of a written engagement letter executed by a member of the Firm.