In 1997, the IRS eliminated strict operating requirements for LLCs to qualify as partnerships for tax purposes, which made LLCs more attractive to operate as they offer the benefits of both limited liability and pass-through taxation.

Solved

In 1997,the IRS

Question 54

Multiple Choice

In 1997,the IRS:

A) made LLCs more attractive by eliminating strict operating requirements to qualify as a partnership for tax purposes.
B) made LLCs more attractive by changing the tax structure making LLCs more profitable to operate.
C) made LLCs less attractive by increasing and redefining operating requirements to properly identify LLCs and weed out companies misfiling for tax break purposes.
D) made LLCs less attractive by eliminating taxation at the business level making the LLC similar to the partnership for tax purposes

Correct Answer: