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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: SeaViewer who wrote (24609)	1/13/2005 7:40:39 PM
From: Jon Tara	Read Replies (1) \| Respond to of 110194

Jeff, LLCs are taxed similarly to subchapter-S corporations - they are "pass through" entities. Distributions are taxed to the members that they are distributed-to. Profits held by the LLC and not distributed to members are not taxed until they are distributed. As with a Sub-S Corporation, there is no "double taxation". I think you will find that most people are using LLCs today in situations where they might previously have used an Sub-S Corporation, because of the additional flexibility of the LLC. You get a Schedule K-1 from the LLC. The LLC also files a Schedule K with the IRS. There are lines on the K-1 for your distributive share of various kinds of income. While I've focused on Ordinary Income (line 1) and Guaranteed payments to partner (line 5), there are other forms of income that may be applicable in your own specific situation. (income from rental real estate activities, interest income, royalty income, etc.) (Sorry for the extended discussion on LLCs and Defined Benefit Plans. I though it would be of interest to a lot of people here, though. I believe there is a tax thread here where we could continue this discussion.)