A Delaware LLC had two members from Jan 1, 2025 until June 2025. In June 2025, one member sold his full interest to the other member, so the LLC became a single-member LLC for the rest of 2025. No corporate tax election was made.
For federal tax purposes, should the LLC file a final Form 1065 ending on the date it became single-member, with K-1s issued through that date, and then report the remaining activity as a disregarded entity? Or should the Form 1065 cover the full 2025 tax year?
Also, for state purposes, should I expect the same split treatment, or does this depend entirely on the state? The LLC is registered in Delaware, but I’m trying to understand if there may also be state filing obligations depending on where the business had income, operations, nexus, or members.
I’m only trying to confirm the correct federal and possible state filing treatment before choosing software or hiring a preparer.
Multi-member LLC became single-member mid-year: final Form 1065 and state filings?
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Posted by tutito84
2 Comments
The partnership ended, and therefore the partnership’s tax year ended, the moment there was only a single member remaining.
And, yes, the final 1065 would be for a short tax year ending at that point that the partnership ended.
To answer the other questions. General the state(s) follow the federal return and would also have a short year return
Having a professional preparer do the initial and final partnership return is often a good idea to make sure the returns and other items (e.g. capital accounts) are wrapped up correctly