LLC taxed as S-Corp Retroactively

Aug 14, 2013
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Hi All.

I have an online business that was handled as a sole-proprietorship as of the beginning of this year. I wasn't aware of the S-Corp taxation benefits (Single member LLC Form 8832, 2553). I created my LLC August of this year and it would be too late to retroactively file the 2553 under that LLC.

My wife has an LLC that has not been used that was active prior to this year. I can change my online business to that LLC's name. I could not use Rev. Proc. 2008-1, 2008-1 I.R.B. 1 as it's too late file, but, I may be able to use Rev. Proc. 2004-48, 2004-32 I.R.B. 172 as I, (a) failed to timely file Form 2553, and (b) had not elected to be treated as a corporation previously.

This is what Rev. Proc. 2004–48, page 172 states:

This document provides that certain eligible entities may request relief for a late S corporation election and a late election to be classified as an association taxable as a corporation
within 18 months of the original due date of the S corporation
election (but in no event later than 6 months after the due date
of the tax return, excluding extensions, for the first year the
entity intended to be an S corporation).

If (Big IF) I'm on the right track, I'm thinking I change to the LLC's name now and then use Rev. Proc. 2004–48, page 172 when taxes are eligible to be filed. Or do I use it now and not wait? Secondly, which may be the bigger issue, will adding myself as a member to my wife's LLC be sufficient as the business has been under my name since its inception?

Any insight on this would be appreciated. Thanks!

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