PDA

View Full Version : Must Sole Proprietor LLC file tax return even though it had no income for the year?



vedernikov
05-08-2011, 09:48 PM
I have Sole Proprietor LLC and I didn't have any financial activity during 2010. Therefore I didn't show it on my personal tax return for last year.

This post on IRS site says that partnership does not require to file. But I am not sure if it is the same for Sole Proprietor LLC.

http://www.irs.gov/faqs/faq/0,,id=199634,00.html

Thanks for your help!

Business Attorney
05-08-2011, 11:11 PM
A single member LLC (http://www.limitedliabilitycompanycenter.com/what_is_a_single_member_llc.html) (the customary terminology for what you are calling a Sole Proprietor LLC) is disregarded as an entity by the IRS. Therefore, it's the same as if you had a sideline unincorporated business that had no financial activity. If there is no activity at all, then you have nothing to report on your Schedule C to your Form 1040. There is no need to file a schedule if there would be nothing on it.

Evan
05-11-2011, 08:08 PM
I agree that there is nothing to report, thus a Schedule C wouldn't be needed. If it were a partnership or corporation (taxed as such), I generally still recommend filing with 0's to prevent them from stating down the line you never filed even though you were not required to do so at the time. For a single member LLC, if there is nothing to report on the Schedule C (or perhaps E or F), I wouldn't prepare it.