Shut it Down

Today TaxMama® hears from Jeb in the TaxQuips Forum, with a long, complicated issue.  Let me summarize. “We want to close down our 3-member LLC, but there are outstanding issues. The CPA says we all need to file extensions, but one member has a big refund and wants it now. What can we do?”



Dear Jeb,

Sure, that partner can file a tax return by April 15th without including the K-1 from the partnership – especially since we can expect that K-1 to provide losses.

Once the K-1 is prepared later on, s/he can file an amended return.

On the other hand, since your LLC is most likely a cash-basis LLC, these unresolved expenses should make no difference. The LLC should prepare the tax return based on income and PAID expenses through 12/31/2012.

So I don’t really see the problem.  The rent litigation should affect the 2013 tax return.

The LLC cannot be terminated until this debt issue is resolved, because no one wants to dissolve the LLC and accept full responsibility for all debt. But that’s just my opinion.

You may get other perspectives from members with a lot of experience, too.

And remember, you can find answers to all kinds of questions about dissolving entities and other tax and business issues, free. Where? Where else? At

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