Which tax ID goes on the exchange documents for a disregarded LLC?

For income tax, a disregarded LLC uses its owner's number

A domestic LLC with one owner is disregarded unless it elects otherwise, under Reg. Section 301.7701-3(b)(1). The identifying number rule follows that classification: Reg. Section 301.6109-1(h)(2)(i) says such an entity 'must use its owner's taxpayer identifying number (TIN) for federal tax purposes.'

The sale and the exchange are income tax events, so the number that matters is the owner's. That is usually your Social Security number. If the LLC's owner is itself an entity, such as a partnership or a corporation, the number is that owner's EIN.

The LLC may still have an EIN of its own. Reg. Section 301.7701-2(c)(2)(iv) treats a disregarded entity as a corporation for employment tax purposes, and many banks ask for an EIN to open an account. Those uses do not make it the taxpayer on the sale.

The W-9 and Form 1099-S both point to the owner

The closing agent must request the transferor's number 'no later than the time of closing', according to the Form 1099-S instructions, and usually does so on Form W-9. The current W-9 says: 'For a sole proprietor or disregarded entity, enter the owner's name on line 1, and enter the business/disregarded entity's name on line 2.' Line 3a is checked for the owner's classification, not the LLC's.

Part I then asks for the owner's SSN, or EIN if the owner has one. The W-9 instructions add that for establishing non-foreign status, 'the U.S. owner of the disregarded entity and not the disregarded entity' gives the form.

Getting this right keeps the 1099-S matched to the return that reports the sale and the Form 8824. A 1099-S issued under the LLC's EIN, when the sale is reported on your individual return, is a mismatch your CPA will have to explain. More on that form is in Form 1099-S and the 1031 exchange.

FIRPTA and state withholding forms follow the same rule

Under Reg. Section 1.1445-2(b)(2)(iii), 'a disregarded entity may not certify that it is the transferor', because the owner is the transferor. The non-foreign certification at closing should be signed by you, with your number, which avoids federal withholding; see FIRPTA and Form 8288-B at closing.

States with seller withholding tend to follow the federal approach. California's Form 593 instructions say that for a disregarded single-member LLC 'that single member is considered the seller/transferor', and ask the member to note on the form that it is for the single member so the escrow agent understands why it differs from the recorded owner.

Other states' forms differ in detail. States that withhold at closing lists them, and the state form should carry the same name and number as your federal paperwork.

Worked example: one sale, four forms, one number

Hypothetical; check your own forms with your CPA. Harbor Rentals LLC, owned only by you and never electing corporate status, holds a duplex in California. The LLC has an EIN from when it employed a part-time manager.

At closing you complete the W-9 with your name on line 1, Harbor Rentals LLC on line 2, the individual box checked, and your SSN in Part I. You sign the FIRPTA certification and Form 593 as the single member with your SSN, noting the LLC on the form.

The exchange agreement names you as taxpayer, 'acting through Harbor Rentals LLC, a disregarded entity', and the replacement is deeded to the same LLC or another LLC you own alone. The 1099-S goes out under your SSN, matching your return.

• W-9: owner on line 1, LLC on line 2, owner's SSN.
• FIRPTA certification: signed by the owner.
• State withholding form: single member's information.
• Exchange agreement: owner as taxpayer, LLC as titleholder.
• Form 1099-S: issued to the owner's number.

When the LLC's EIN is the right number

If the LLC has two or more members, it is a partnership by default and uses its own EIN, and the partnership is the exchanger. If it elected S corporation or corporate status, it also uses its EIN; what an S election does to an exchange covers the consequences.

Confirm the classification from the last filed return before closing. The answer to 'which number' is really the answer to 'who is the taxpayer', which can an LLC do a 1031 exchange explains, and it is the same answer whether the replacement is a building or a Delaware Statutory Trust interest subscribed in the LLC's name.