If you are not familiar with Taxes and Accounting please pass on this one:
A LLC (limited liability company) is the fasted growing entity form used by both small and large businesses. S corporations continue to have the greatest number of tax filings every year.
SOURCES:
Treasury Regulation §301.7701-3 Entity Classification, including (b)(1), (c)(1), (c)(1)(v)(C)
Revenue Procedure 2002-69
BOTH MAY BE FOUND WITH A GOOGLE SEARCH (e.g., Treasury Regulation 301.7701-3)
REQUIRED – USE THE CITATIONS ABOVE TO ANSWER THESE QUESTIONS, AND INDICIATE WHAT AUTHORITY SUPPORTS THE ANSWER
4. The tax law allows an LLC to elect to be classified as a corporation (association status). If someone forms an LLC but wants it to be treated as an S corporation, how is the election to treat an LLC as an S corporation made?
Use IRS Form 2553 to file this election. This form provides the IRS with detailed information about the corporation requesting S corp status and about the corporation's eligibility for electing this status.
The IRS has 8 qualifications for S Corporation status, including:
The IRS requires that the Sub-chapter S Election be filed no more than two months and 15 days after the beginning of the tax year the election is to take effect. For a startup, this means the first year of the business.
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