Note that the label "disregarded entity" means that for income tax purposes the entity is ignored. The entity's income and deductions are reported on its owner's tax return. For example, an LLC operating an active trade or business and owned by a single member would have its income and deductions reported on the owner's individual tax return on a Schedule C tax form. An LLC passively investing in real estate and owned by a single member would have its income and deductions reported on the owner's individual tax return on a Schedule E tax form. And an LLC owned by a corportion--in other words, an LLC with a single corporate member--would be treated as an uncorporated branch and have its income and deductions reported on the corporate tax return. | Note that the label "disregarded entity" means that for income tax purposes the entity is ignored. The entity's income and deductions are reported on its owner's tax return. For example, an LLC operating an active trade or business and owned by a single member would have its income and deductions reported on the owner's individual tax return on a Schedule C tax form. An LLC passively investing in real estate and owned by a single member would have its income and deductions reported on the owner's individual tax return on a Schedule E tax form. And an LLC owned by a corportion--in other words, an LLC with a single corporate member--would be treated as an uncorporated branch and have its income and deductions reported on the corporate tax return. |