Switching from C corporation to LLC
"A husband and wife who reside in a non-community property state are sole members of LLC registered in another non-community property state. The entity elected to file as C corporation in previous years. This year, the husband and wife would like to report the entity's income in a flow through manner.
1. Would they need to report the entity's income in their individual Schedule C or form 1065 (partnership return)?
2. Would they need to file a request or separately inform the IRS about the switch?"
The IRS publications on this issue seem to be contradicting each other. Your insights will be greatly appreciated!