Question

The guidance in Rev-Proc.2002-69:

a. Is limited to residents of non-community property states

b. Permits qualified entities to be treated as either partnership or sole proprietorship for federal tax purposes

c. does not apply to single member LLCs (SMLLCs)

D Applies for federal income tax purposes but not self-employment (SE) tax purposes

Answer 1

Revenue Procedure 2002-69 permits a business entity that is wholly-owned by a legally married couple as community property to treat that entity, which has not elected federal taxation pursuant to either Subchapters C or S, as either: (1) a disregarded entity or as (2) a partnership taxed pursuant to Subchapter K of the Internal Revenue Code.

So the answer is:

b. Permits qualified entities to be treated as either partnership or sole proprietorship for federal tax purposes