Taxes for Plane LLC

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Code90

Pre-takeoff checklist
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Code90
Not expecting any true accounting advice, but what do others file who own their planes in multimember LLC's. Our LLC maintains the plane and owns it. Have others filed just a 1020 with zero as profit / loss?
 
yup. I'm not our 'accountant' but that's basically what we do. I know we haven't paid any taxes in the 2 years I've been in the plane.
 
1020. We figure the IRS loves paper and tends to be jerks if their magic paper reporting $0 isn't provided. For all we know they throw all three copies away, but the more paper the better.
 
A multi-member LLC that did not elect to be taxed as a corporation is treated as partnership by the IRS.

So your group needs to file either a partnership or the appropriate corporate tax return, depending on the election or non-election that you made when you formed your LLC.
 
Jim is right. I don't know what a 1020 is though. Never seen that form.
 
Jim's correct. And I'll admit I just said "1020" without knowing the actual stupid form number.

Here I will re-word my reply:

Whatever idiotic piece of paper that says the LLC didn't make money, depending on the type of LLC...

File that useless piece of bureaucratic crap!
 
We did elect to be recognized as a corporation (and have the letter from the IRS where they accepted that status). Suspecting 1020 (corporation income tax return) is the right form. Would call the IRS, but suspect would get different answer every time I called.
 
Oh then you're looking for the 1120. And I agree on different answers, if you get through to anyone at all.
 
A question for those of you who use an LLC for ownership of their airplanes:

Do your LLC tax returns show no income at all, and no expenses? Or
Do your LLC tax returns show the contributions made by LLC members (to cover expenses) as LLC income, and the LLC's payment of expenses as deductible expenses?
 
Lon33 said:
A question for those of you who use an LLC for ownership of their airplanes:

Do your LLC tax returns show no income at all, and no expenses? Or
Do your LLC tax returns show the contributions made by LLC members (to cover expenses) as LLC income, and the LLC's payment of expenses as deductible expenses?
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Does the LLC have its own bank account? Is there an engine slush fund? All sorts of possibilities there.
 
Code90 said:
We did elect to be recognized as a corporation (and have the letter from the IRS where they accepted that status). Suspecting 1020 (corporation income tax return) is the right form. Would call the IRS, but suspect would get different answer every time I called.
Click to expand...

Get a copy of the determination letter. That will tell you what form they are expecting. Don't really know why you would form an LLC and then do the "check the box" to file as a corporation.
 
asgcpa said:
... Don't really know why you would form an LLC and then do the "check the box" to file as a corporation.
Click to expand...

There are significant legal issues involved when determining what form of legal entity to use for the purpose of jointly owning and operating an airplane. These issues are state dependant and bigger than tax issues.

The IRS justs wants taxes paid in the unlikely event your entity makes money. You should know that if you create a non-profit corporation you might get fined if you forget to file.

[Edited because the original post was apparently written by my four year old grandson!]
 
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I asked this when purchasing the last aircraft, but perhaps it could be asked again. If not an actual business, is there any benefit for an individual to have his aircraft under an LLC? I received mixed reviews on the last go-around. Taxes are already paid on it, and I have no business reason to use it that I'm not already reimbursed for...so...
 
I wouldn't think contributions to the LLC by LLC members would be income. Should be capital contributions. If you're filing a return, you need to be able to substantiate your numbers. You don't want the IRS to accept your income and disallow your expenses because you just made them up to get to zero. Then everyone is paying tax.
 
aggie06 said:
I wouldn't think contributions to the LLC by LLC members would be income. Should be capital contributions. . . . You don't want the IRS to accept your income and disallow your expenses because you just made them up to get to zero.
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I agree that contributions could be characterized as capital contributions. And I agree that it would be terrible if the IRS disallowed expense deductions (though they should be easy to document) while accepting contributions as income. But if contributions aren't income, then the LLC won't have any income at all. So how does the LLC account for its expenses? Do LLC owners simply file tax returns that show no income and no expenses: $0 on both lines?:dunno:
 
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