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Special Rule for Married LLC Members in Wisconsin

Attorney Thomas B. Burton explains a special IRS rule for multi-member LLCs in Wisconsin where the only members are a married couple.

Transcript of Video: Special Rule for Married LLC Members in Wisconsin

Today I want to talk about a special

rule for LLC members in a community

property state Wisconsin has community

property or what we call in Wisconsin

marital property that's the system of

marital property between a husband and

wife and it differs from other states

which may not have community property

they have separate property but in

Wisconsin if you're a husband and wife

you can form an LLC and both be members

of that LLC and still be treated as a

disregarded entity for federal tax

purposes if you watch some of my other

videos on LLC's I've talked about the

difference between a multi-member and a

single-member LLC generally if you're

single-member LLC your disregarded

entity meaning the profit and loss can

flow through to your personal income tax

return but if you're a multi-member LLC

you must file form 1065 the federal

partnership return however this is a

great benefit to husbands and wives in

Wisconsin in that they can form an LLC

both be 50/50 members if they want 60/40

whatever they want be equal members in

the business and still file their taxes as

a disregarded entity without incurring

the time and expense of filing that

extra form 1065 partnership tax return

so if you live in Wisconsin and you're a

husband and wife going into business an

LLC can be a great vehicle because you

can still you get the benefits of that

liability protection but you still can

choose to be a disregarded entity which

reduces your ongoing tax compliance

cost so that's a great benefit to

forming an LLC as a husband and wife in

Wisconsin and one that many people don't

know about keep that in mind with

thinking about what business entity

would be the best fit for your new

business. Thank you for watching if you

have a topic for a future video blog

post feel free to submit it

below and I'll try to answer it in

upcoming sessions.

© 2018 Law Office of Thomas B. Burton. All Rights Reserved.

Transcript and captions provided for ease of access for the hearing impaired.

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