How to tax a new LLC
I am currently in the process of creating a new business LLC in Nevada with another member (70/30 financial split). My attorney recommended I to talk with a CPA to see what is the best way to create my company's taxation. If I should do it as a partnership, c-corp, s-corp, or a subselection (I think he called it), and why it's the best?
As a CPA, I came across this website and joined just last week, and I just came across your question.
I agree with your attorney wholeheartedly that you should talk with a CPA about your specific circumstances (and the specific circumstances of the other potential LLC member) in order to plan the best way to structure the business for tax purposes. Also, in making that decision, it’s important to consider what you plan to do with the business. Keep in mind that an LLC is a creation or creature of state law. How it is treated for federal income tax purposes is a completely separate matter. Because two of you are involved, you are correct that (for federal income tax purposes), the LLC can be treated as a partnership, C-corporation, or S-corporation. Making the Subchapter S election is how you elect to treat an LLC as an S corporation, so a Subchapter S election is not a fourth type of entity/choice.
In all honesty, the issue of entity election that you are raising is one that is extremely fact-specific, so you really should engage a CPA to listen to your situation and advise you. Feel free to check out my profile on this website as well as Google reviews and please feel free to contact me, if you wish to engage me to help navigate you through the issue at hand.