SMLLCSingle Member Limited Liability Company
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Caution: This ruling related only to a charging order against the sole member's interest in the LLC, not to the general liability protection afforded the sole member from the SMLLC's "internal liabilities"
In holding that the transaction was not a tax-flee reorganization, the court determined that the economic substance of Times Mirror's management of the SMLLC's assets represented boot; thus, Times Mirror did not receive stock of the requisite 80% value, as required by Sec.
An SMLLC taxed as a disregarded entity must use its owner's accounting methods.
In the example, X has not only protected the appreciation in the TPT assets from creditors, but has also reduced his taxable estate from $1 million to $594,000 (assuming X transferred the remaining 1% SMLLC interest to another estate planning structure (14)).
Consequently, this article demonstrates that the SMLLC can be used to blunt the negative effects of section 2512 (a gift tax provision), section 1015 (an income tax provision), and section 2036 (an estate tax provision).
A South Dakota investment SMLLC with the trust as the sole member is a common structure.
The BLS proposal was very similar to the Tax/RPPTL proposed legislation in providing that a charging order would be the sole and exclusive remedy available to judgment creditors who held judgments against a member of a multi-member LLC (MMLLC), but it also tried to protect SMLLC members by including SMLLCs in the general "exclusive remedy" rule, while carving out an exception which allowed for judgment creditors to seek more assertive judicial orders in connection with SMLLCs.
The "transparency" of the SMLLC presents several unique tax utilizations and issues.
Each SMLLC must have its own federal EIN and also enroll in the electronic federal tax payment system (EFTPS).
Often, partnership interests are owned through a disregarded entity, such as a single-member LLC (SMLLC) or a qualified S corporation subsidiary, which will allow the entity's owner to be the partner for income tax purposes while effectively limiting liability for the partnership's underlying debts.
To be more specific, should an employee of a single-member limited liability company (SMLLC)--where the sole member is a tax-exempt IRC section 501(c)(3) organization--be allowed to participate in the organization's company-sponsored retirement plan?