USA Disregarded Entity Question

[paula marques]

Company A owns company B. Company B is a disregarded entity so its income/loss flows through company A.

Company A has one shareholder, the shareholder would like to keep company A & B separate, whereas they are each stand alone entity's owned by him.

what is the best way to go about doing this and what are the tax consequences.

 

[Marianne]

Hey Paula
I'm not an accountant. It sounds like you should consult yours to get the right advice. I own a few companies so I'm just giving street advice. It sounds like company A needs to sell/transfer ownership of company B to a separate company owned by the one shareholder. Then company B would keep its income/loss separate from company A.

If Company A still needed to be involved financially with company B then you could set up some type of lease that could fit your needs. Still keeping the liability of both company's separated

I don't know your tax consequences other than filing returns for two companies instead of one

Good luck