In January 2007, I created a SMLLC (single-member LLC) for purposes of building a track record, vested with a small amount of my personal funds. It is likely to remain just a single member entity (no partners) for at least a few more years.
Just to reduce the pain of tax preparation this year, my current plan is to keep its default classification as that of a "disregarded entity", which means even though it has limited liability for legal purposes, for tax purposes it is treat as a sole proprietorship. My understanding is this being the case, I don't need to fill out the LLC federal taxation forms or Schedule K/ K-1 partnership forms.
Instead, I believe I can list expenses on Schedule C of my 1040. I wanted to verify that for income, which is entirely of the form of 1256 contract profit/loss, I can use Form 6781 which links in with Schedule D. On Schedule C, I would list income as 0, as all the income is through capital gains/losses, and I would just list expenses.
I just wanted to double check that this is indeed the cases, and that I'm not supposed to list the income on Schedule C instead, which would have the effect of converting investment income to earned income, subject to higher tax rates + self-employment taxes. I'm pretty sure using Form 6781 and Schedule D is the way to do it, but was a little worried since all the literature I can find on this mentions using Schedule C, and doesn't refer to Schedule D.
Thanks in advance!
Just to reduce the pain of tax preparation this year, my current plan is to keep its default classification as that of a "disregarded entity", which means even though it has limited liability for legal purposes, for tax purposes it is treat as a sole proprietorship. My understanding is this being the case, I don't need to fill out the LLC federal taxation forms or Schedule K/ K-1 partnership forms.
Instead, I believe I can list expenses on Schedule C of my 1040. I wanted to verify that for income, which is entirely of the form of 1256 contract profit/loss, I can use Form 6781 which links in with Schedule D. On Schedule C, I would list income as 0, as all the income is through capital gains/losses, and I would just list expenses.
I just wanted to double check that this is indeed the cases, and that I'm not supposed to list the income on Schedule C instead, which would have the effect of converting investment income to earned income, subject to higher tax rates + self-employment taxes. I'm pretty sure using Form 6781 and Schedule D is the way to do it, but was a little worried since all the literature I can find on this mentions using Schedule C, and doesn't refer to Schedule D.
Thanks in advance!