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Christina Hsu
  • Redondo Beach, CA
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Tiebreaker needed: different opinions on spouse LLC

Christina Hsu
  • Redondo Beach, CA
Posted

I have asked several different tax providers, and gotten different answers to my questions each time. I need a tiebreaker! Here's the situation: My husband and I created an LLC in Indiana purely for real estate investing. We live in California. Currently we are a 2-member LLC. We want to be able to consider the LLC a disregarded entity.

a) Since CA is a community-property state, can we be a disregarded entity (for tax purposes) with 2 members?

b) Can we state on the EIN/8832 that we are a single-member LLC, but still have 2 spouses be members?

The only thing the tax providers agree on is that filing as a disregarded entity is much easier than as a partnership. I would like to avoid all the partnership issues, but want to ensure that we both are covered in case something happens to one of us.

The LLC was just created, so I have an opportunity to change things if I need to.

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