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Visitor II

schedule k vs schedule c

My husband and I live in a community property state.  After enrolling with IRS to get an EIN for our LLC, we put down as partnership.  Later realized that we could would be classified as a disregarded entity. IRS sent us a letter that it was changed but is was in the middle of the year.  Do I submit a schedule K for the first half of the year and then file the schedule C with info from K and then the last have with Schedule C only?

1 Comment
TurboTax Specialist

schedule k vs schedule c

The IRS link below says that when you change entities the change is treated as a liquidation, so both would be reported. Depends on whether you put an effective date on the entity change request.

Change of Entity

 

You could file as a schedule C and explain it to the IRS later should there be an issue. Since the K-1's flow through to the 1040, there shouldn't be any additional taxes owed, just different forms/returns.