Here are the facts:
MA LLC, registered with MA Sec of State - five members. One is another MA LLC, with 3 MA individual residents as it’s members. One is a MA individual resident. The others are non-MA resident individual partners. The LLC partner is the managing member. The others do not participate in the running of the LLC. Each partner contributed money into the LLC during 2019 (the initial year) and the LLC then loaned this money to a MA corporation to use to run it’s business operations. In January 2020, the loan was converted to equity. That’s it. The LLC has made no other loans, no other investments and doesn’t intend to make any others.
The only income the LLC received was interest income the corporation paid to the LLC (well actually the interest was tacked on to the note and not actually paid).
Here’s my question: is the LLC required to file a MA partnership return to report the interest income? A representative from the MA DOR told me the LLC would not be required to file because it would not be considered to be doing business in MA.
Curious what others think?