From:  Thomas
Date:  Wed, 20 Apr 2011

Mr. Gray:

Thank you over the years for your great newsletters. They have proved an invaluable source of information.

I'm computing the California fee for an LLC. I have two California LLCs owned by a third managing LLC. The gross receipts for the two subs are a total of $1.1 million. The managing LLC is only reporting the net income of the two subs. This creates the highest fee of $6,000 based on the attribution of the two subs gross receipts.

Isn’t that double taxation of the gross receipts for the two subs?

Thank you for your help if you can provide the same.

Answer

Date:  Mon, 16 May 2011

Hello Thomas,

See the Limited Liability Company Income Worksheet. You subtract the amounts already subject to the LLC fee at line 3.d.

Good luck!

Mike Gray

For answers to new questions, subscribe to our newsletter, Michael Gray, CPA's Tax & Business Insight by filling out the form below.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained on this website was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.