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Tax, SDIRAs & Cost Segregation

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Clive Smith
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Parent and child llc tax question

Clive Smith
Posted Feb 21 2024, 17:20

Parent llC in wyoming - 50% owned by me and 50% owned by my spouse

Child LLC in North Carolina - 100% owned by parent LLC

We brought one 5 unit property in NC in 2021 using Child LLC name as owner and paid cash.

Property management is managing it and giving check on the name of property owner who is Child LLC


prior cpa was filing taxes under Parent LLc as the child LLc is a pass through entity.

Our new CPA is getting confused and asking us to register Parent LLC in NC as foreign entity doing business and asking to get all our rents paid on Parent LLC instead of Child LLC.

Can anyone in NC chip in on how this work? would appreciate your time, thank you

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David M.
  • Morris County, NJ
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David M.
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Replied Feb 21 2024, 19:12

@Clive Smith

Interesting...

Was your prior cpa filing the parent with a partnership return (I believe 1065)?  the child would be a disregarded entity and thus "collapses" onto the parents partnership return.  I thought in some instances married owners were treated as one, so I'm not sure.

I think the issue is how is the NC taxation filed.  Since the child is disregarded, probably/maybe by NC as well, the primary EIN is the parent.  But, to file under the parent, the parent would need to be registered in NC.

I am interested in this.  Perhaps @Basit Siddiqi or @Michael Plaks has a minute to chime in?

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Basit Siddiqi
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Basit Siddiqi
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Replied Feb 22 2024, 05:23

Sounds like the child LLC is a disregarded entity.

Sounds like your current CPA doesn't know what he/she is doing.

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Clive Smith
Replied Feb 22 2024, 05:28
Quote from @David M.:

@Clive Smith

Interesting...

Was your prior cpa filing the parent with a partnership return (I believe 1065)?  the child would be a disregarded entity and thus "collapses" onto the parents partnership return.  I thought in some instances married owners were treated as one, so I'm not sure.

I think the issue is how is the NC taxation filed.  Since the child is disregarded, probably/maybe by NC as well, the primary EIN is the parent.  But, to file under the parent, the parent would need to be registered in NC.

I am interested in this.  Perhaps @Basit Siddiqi or @Michael Plaks has a minute to chime in?


 Yes it was filed a 1065