# Converting Single Member LLC to multi to free up losses

**URL:** <https://discussion.mainstreetbusinesspodcast.com/t/converting-single-member-llc-to-multi-to-free-up-losses/238>\
**Category:** Tax Strategies\
**Created:** [February 22, 2023, 6:42pm UTC](https://discussion.mainstreetbusinesspodcast.com/t/converting-single-member-llc-to-multi-to-free-up-losses/238 "2023-02-22T18:42:02Z")\
**Posts on this page:** 1\
**Page:** 1

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**Author:** ![gouldingj](https://avatars.discourse-cdn.com/v4/letter/g/74df32/32.png) [@gouldingj](https://discussion.mainstreetbusinesspodcast.com/u/gouldingj)\
**Post date:** [February 22, 2023, 6:42pm UTC](https://discussion.mainstreetbusinesspodcast.com/t/converting-single-member-llc-to-multi-to-free-up-losses/238/1 "2023-02-22T18:42:02Z")

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Hi-  
Big fans of your show and I listen always!

I have a business setup as a single member LLC that I heard from my accountant I should convert to a Multi-member LLC by adding my spouse as a limited partner for a few reasons:

1- Reduce S/E tax on my spouses portion of the income.

2- Free up passive losses and offset with my spouses portion of the income

3- Reduce my audit rate filing a 1065 as opposed to Schedule C.

I live in NYC, so an S corp isn’t worth it as NYC doesn’t follow S-corps and their corp rate is 9%.

Does what my accountant mention seem legitimate?

Thanks and looking forward to your thoughts.