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Is a Single Member Self-Directed IRA LLC Required to File a Federal Income Tax Return?

No – a single member LLC is treated as a disregarded entity for federal income tax purposes and thus no federal income tax return is required to be filed.  Since the member/owner of the LLC is liable for any tax on the profits generated by the LLC, the member/owner not the LLC is responsible for reporting the income.  In the case of a single member LLC owned by an individual, the individual would be required to report the LLC income on his or her federal income tax return (i.e. Schedule C or Schedule E).  However, since an IRA is exempt from tax pursuant to IRC 408, an IRA is not required to file a federal income tax return.  Hence, a single member LLC owned by an IRA will have no federal income tax return filing requirements.

Posted in Self-Directed IRA

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