Question

LM, a domestic limited liability company (LLC), is formed in March of the current year. The...

LM, a domestic limited liability company (LLC), is formed in March of the current year. The entity has two members and does not disregard its default classification for tax purposes. What is the default classification of KLM for tax purposes?

A. Partnership.

B. Association taxed as a corporation.

C. Limited liability company.

D. Sole proprietorship

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer : Option A - Partnership

LLC, limited liability company is a hybrid of both partnership and sole proprietorship. There is no status as LLC for tax purposes(Option C is incorrect)

When LLC has one member it is classified as sole proprietorship for the tax purposes and if LLC has two or more than two members then it is classified as Partnership for tax purposes. (Option D is incorrect and Option A is correct)

LLC is not treated as association taxed as corporation for the tax purposes. (Option B is correct)

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A personal liability of each partner in a general partnership is for: A) the total debts...
A personal liability of each partner in a general partnership is for: A) the total debts of the partnership, only when they were unaware of those debts. B) their fractional share of all partnership debts regardless of which partner incurred that debt. C) all personal and partnership debts incurred by any partner, even if they were unaware of those debts. D) only the partnership debts that they personally created. E) None of the above 3) An LLC (limited liability company):...
Proprietorship Partnership Corporation-C Corporation-S LLC LLP Ease of formation Number of owners Owners’ liability General partner...
Proprietorship Partnership Corporation-C Corporation-S LLC LLP Ease of formation Number of owners Owners’ liability General partner Limited partner Life of firm (consequence of 1 owner dying) Is it a separate legal entity? Are owners & the business taxed separately? Degree of control by 1 owner General partner Limited partner Complete the above table.
If you are not familiar with Taxes and Accounting please pass on this one: A LLC...
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,...
1.) The basic rules governing how a corporation is organized and how it conducts its business...
1.) The basic rules governing how a corporation is organized and how it conducts its business are known as _____. a. certificates of organization b. corporate bylaws c. prospectuses d. articles of incorporation 2.) A _____ is a legal business entity that offers limited liability to all of its owners. a. Limited partnership b. General partnership c. Sole proprietorship d. C corporation 3.) How is the formation of limited liability companies (LLCs) similar to the formation of corporations? a. Similar...
Andrea would like to organize SHO as either an LLC (taxed as a sole proprietorship) or...
Andrea would like to organize SHO as either an LLC (taxed as a sole proprietorship) or a C corporation. In either form, the entity is expected to generate an 11 percent annual before-tax return on a $200,000 investment. Andrea’s marginal income tax rate is 35 percent and her tax rate on dividends and capital gains is 15 percent. Andrea will also pay a 3.8 percent net investment income tax on dividends and capital gains she recognizes. If Andrea organizes SHO...
Andrea would like to organize SHO as either an LLC (taxed as a sole proprietorship) or...
Andrea would like to organize SHO as either an LLC (taxed as a sole proprietorship) or a C corporation. In either form, the entity is expected to generate an 11 percent annual before-tax return on a $200,000 investment. Andrea’s marginal income tax rate is 35 percent and her tax rate on dividends and capital gains is 15 percent. Andrea will also pay a 3.8 percent net investment income tax on dividends and capital gains she recognizes. If Andrea organizes SHO...
Andrea would like to organize SHO as either an LLC (taxed as a sole proprietorship) or...
Andrea would like to organize SHO as either an LLC (taxed as a sole proprietorship) or a C corporation. In either form, the entity is expected to generate an 10 percent annual before-tax return on a $320,000 investment. Andrea’s marginal income tax rate is 35 percent and her tax rate on dividends and capital gains is 15 percent. Andrea will also pay a 3.8 percent net investment income tax on dividends and capital gains she recognizes. If Andrea organizes SHO...
Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided...
Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $41,800 and $32,100 to each member, respectively. In addition, the operating agreement specified an income-sharing ratio of 3:1. The two members withdrew amounts equal to their salary allowances. Revenues were $668,000 and expenses were $520,000, for a net income of $148,000. Note: The reduction in members’ equity from withdrawals would be disclosed on the statement of members’ equity. Required: A....
Andrea would like to organize SHO as either an LLC (taxed as a sole proprietorship) or...
Andrea would like to organize SHO as either an LLC (taxed as a sole proprietorship) or a C corporation. In either form, the entity is expected to generate an 11 percent annual before-tax return on a $200,000 investment. Andrea’s marginal income tax rate is 35 percent and her tax rate on dividends and capital gains is 15 percent. Andrea will also pay a 3.8 percent net investment income tax on dividends and capital gains she recognizes. If Andrea organizes SHO...
This is just a discussion post from my classmate. I just need to respond. Based off...
This is just a discussion post from my classmate. I just need to respond. Based off of what is written, please answer with a simple analysis of what's written. (example: Interesting post, I see that...) 1. Discuss each of the following business entity types including ownership, financial and legal and tax issues related to each type. Sole Proprietorship A sole proprietorship is owned by only one person and the firm and the owner are considered one and the same from...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT