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When applying for LLC with North Carolina and for federal tax purposes, I listed the company as an LLC partnership (consisting of two members). However, the second partner is a silent partner and has not invested financially or profited during the last year. Does this by default classify me (in the eyes of the IRS) now as a sole proprietorship? Meaning instead of filing form 1065 I would just file using Schedule C on 1040?


ANSWER


The BIDaWIZ Team's Answer:

It appears as though you do not meet the requirements set forth to be considered a partnership under the Internal Revenue Code. The entity would likely be treated as a disregarded entity for tax purposes. You may want to consider converting to an S Corporation. If you need help with this matter, you can submit a request to work with a tax accountant online

The BIDaWIZ Team

 

 

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