With backdating


15-Dec-2020 17:37

I have recently gone to work for a small business in which many entity changes were effected by a previous outside tax planner as of the end of 2011 and throughout 2012. During year 2012, four additional LLCs were created to conduct different lines of business for the same married owners.

with backdating-66

Cam 7sex

The intention was that each of these entities would be “divisions” of the original S-corp which would be the “holding company” for them all, which would have made it possible for just one tax return to be filed under the tax ID of the holding company.The LLCs would have been “disregarded entities” with the owner being the holding company, 100%.This would have reduced tax return preparation time for year 2012 by making it possible to file just one consolidated return, and this arrangement would have made it possible for the profits and losses of these six entities to be netted against each other within the holding company S-corp.' data-inline-edit-type='wysiwyg' data-inline-edit-url='/answers/605617' id='inline_edit_answer_605617_body' Fraudulent backdating to provide a tax advantage is illegal.

However I don't think backdating to show proper intent and substance is necessarily wrong.But if we cannot file a consolidated return, each entity will have to file separately (on Form 1065), and the owners may not be able to take advantage of the loss due to lack of sufficient basis in that one entity.