Confused about 7004 Extension for 1065 Partnership - Consolidated Return Question

I'm working on submitting a 7004 extension for my partnership's 1065 form and running into a weird question. My situation is that I have an LLC partnership that fully owns (100%) another LLC which is the one actually generating revenue. I'm looking at line 3 of Form 7004 which says: "If the organization is a corporation and is the common parent of a group that intends to file a consolidated return, check here. If checked, attach a statement listing the name, address, and employer identification number (EIN) for each member covered by this application." In previous years, I've submitted a consolidated return as the parent partnership. But here's my confusion - the form specifically mentions "if the organization is a corporation" but my parent company is structured as an LLC, not a corporation. Should I check this box anyway and attach the info for my subsidiary LLC? Or is the consolidated return option only available for corporations? The instructions aren't super clear on how to handle this for partnerships with subsidiaries.

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18 comments

Miguel Alvarez

•8M

You've got a good question there about Form 7004. The confusion is understandable, but I can clarify this for you. The consolidated return provisions specifically apply to corporations, not partnerships. When Form 7004 refers to consolidated returns, it's addressing C corporations that file Form 1120. Partnerships filing Form 1065 don't file consolidated returns in the same technical sense. For your situation with an LLC parent and subsidiary, you should NOT check that box on line 3. Instead, you'll need to file separate extensions if both entities require them. The parent LLC partnership files its own 7004 for its 1065, and if the subsidiary has separate filing requirements, it would need its own extension. What you've likely been doing in the past isn't technically a "consolidated return" in IRS terminology, but rather reporting the subsidiary's activity on the parent's return because of how flow-through entities work.

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Miguel Alvarez

•8M

Yes, you're handling it correctly! Since the subsidiary LLC is a single-member LLC wholly owned by the partnership, it's a disregarded entity for federal tax purposes. You should continue including all the subsidiary's income and expenses directly on the parent partnership's Form 1065. This isn't technically a "consolidated return" - it's simply how disregarded entities are reported. You only need to file one Form 7004 for the parent partnership's 1065 extension. The disregarded subsidiary doesn't need a separate extension since it doesn't file its own return. The box on line 3 should remain unchecked since that's specifically for corporate consolidated groups.

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•8M

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Amina Bah

•8M

You're generally correct that partnerships themselves don't pay federal income tax as they're pass-through entities. However, partnerships can still be subject to making tax payments in certain situations. Some partnerships may need to make estimated payments for things like withholding for foreign partners, or for potential audit adjustments under the centralized partnership audit regime. Also, many partnerships have to pay state taxes or fees depending on their location, and those might require estimated payments.

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