Generally, a business unit of two or more members is classified for federal tax purposes either as a capital corporation or as a partnership, and cannot be treated as an entity not taken into account.  However, many authorities agree that an LLC owned as a tenant by a husband and wife cannot be considered.  The IRS has not yet provided specific guidance on this topic, but has provided other guidance that supports this conclusion. A common point of confusion is what the Statute will do to amend agreements and agreements that are now in force and that require executive members. In Rev Proc. In 2002-69, the IRS found that a business owned exclusively by a couple as a condominium could be considered not included for federal tax purposes under applicable local law. Under the right of common ownership, the property belongs equally to the husband and wife, and neither spouse has a full interest in the property. Similarly, under global lease law, each spouse has an equal and untavided interest in the assets. Therefore, it is likely that the IRS will consider a husband and wife-owned LLC as a tenant as a whole, just as they consider an LLC in the co-ownership state.
This is one of the food industry`s best kept secrets. With the top level of security guarding the vault that houses it, few people in the world know its contents in its entirety. What`s so secret that you need a state-of-the-art safe surrounded by motion detectors, cameras and 24-hour guards? This is nothing but Colonel Sanders` roast chicken recipe with the famous 11 herbs and spices! One of the most common questions we are asked by accountants, tax lawyers, and other advisors is whether an LLC owned by a husband and wife as a tenant cannot be considered for income tax purposes. Often, the LLC is also partly owned directly by either spouse or through a trust considered for income tax purposes as the property of either spouse (an incorrect grantor trust), and we believe the same result applies.. . . .