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LLC formed, not used. Want to use now.

October 23, 2016 • Susan Feldman • Log In to Post Comments

Client owns rental properties with an unrelated partner.  They want to put them in an LLC. Kept talking about getting LLC formed, but didn't think anything happened.  They just found out that an LLC was formed in January 2014.  No $800 tax was ever paid and no returns were filed.  The rental income and expenses were reported ratably on the partners individual returns.  Title to the properties were never transferred into the LLC.  They now want to use the LLC and transfer the properties into it.  If they use the LLC which was originally formed is the FTB going to be looking for the $800 tax payment for the unfiled years? Are they better off not using it and forming a new LLC?




Yes if they put the property in, they must file 2014 and 2015 returns and pay the $800 plus penalties and interest.

ok, looks like they're better off abandoning it and starting over since the property was never put in, and all income was reported as income from a rental property rather than income from an LLC.  Thank you


I agree

Isn't the FTB going to impose the $800 tax minimum tax (and penalties/interest) for the years the LLC existed, regardless whether the property was placed in the name of the LLC or not?  

Not if the LLC meets the criteria of the Ralite case.


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