LLC taxes in Virginia
Hi! My husband and I are preparing to establish an LLC for our buy-and-hold rental properties. Does anyone know how Virginia taxes LLCs comprised of a husband and wife? (e.g. sole proprietorship, partnership). Thanks in advance!
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Brooks is correct in that a LLC with more than one member is simply a "pass-through" organization where end of year profits or losses pass through to your personal tax return. There are different pass through entities that can be used to report the business activities of the entity. Typically most LLCs file as a partnership (reported on form 1065) but some file as a S Corp (reported on form 1120S). For each type of tax return each partner's share of profits are reported on a K-1. For a throrough explanation of LLC tax reporting options see this link from the IRS at:
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/LLC-Filing-as-a-Corporation-or-Partnership