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Can LLC ownership contain cycles? E.g. A is 50% owned by B which is 25% owned by A? Would a US state or the IRS notice if this happened on a longer obfuscated c

• gamblor956 9y ago
  LLCs organized as partnerships are required to report their partners to the IRS. If the partners are partnerships themselves, they must keep disclosing the partners recursively up to individual or corporate partners.
  • _acme 9y ago
    LLCs may be taxed as flow-through entities (similar to partnerships), but no LLC is organized as a partnership, that's simply a nonsensical statement; an LLC is a distinct and separate type of entity to a partnership, limited partnership, LLP, LLLP and corporation.
    • gamblor956 9y ago
      For tax purposes, an LLC is either a corporation or a partnership; it's not merely similar to one or the other. LPs, LLPs, and LLLPs are taxed like partnerships, unless they are foreign registered, in which case they are taxed like corporations. An LLC treated as as partnership for tax purposes is required to disclose it's partners all the way up the chain. Legally, an LLC is organized like a partnership (member managed) or like a corporation (manager managed). I should have been more precise there. I was using shorthand because I was assuming the tax context and should have acknowledged that the tax treatment differs from the legal treatment.