That's great to hear, so the original owner hasn't changed? Or was only her husband the original owner? And it sounds like the son is out of the equation, so we are really talking about how to handle the transfer of Sole Prop to an LLC between husband and wife.
I am not an accountant, but my feeling is the stipulation of marriage may complicate the discussion more in regards to "ownership" in the legal sense. I am not sure if those classifications are treated differently when the transfer is between husband and wife. You might want to reach out for legal advice on this.
I'm really glad you are able to stay on and help, I know that with the loss, she will appreciate consistency in her life. Plus, that trust you've already established is invaluable.
You should start a new set of books. Legally an LLC is a new entity. It can still be run as a sole proprietorship. It is considered a disregarded entity.
You would need to change the social security number to an EIN number. If it is an EIN number, you probably can use the same number.
You should check with your accountant.
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