Identify which of the following statements is true.
A)Under the check-the-box regulations, an LLC that has one member (owner)may be disregarded as an entity separate from its owner.
B)An unincorporated business may not be taxed as a corporation.
C)A new LLC that is owned by four members elects to be taxed under its default classification (as a partnership)in its first year of operations. The entity is prohibited from changing its tax classification at any time in the future.
D)All of the above are false.

Question

Quizplus · Accepted Answer

Option A is true under the check-the-box regulations, as a single-member LLC is considered as a disregarded entity for tax purposes, and its income is reported on the owner's individual tax return. Option B is false as some unincorporated businesses may elect to be taxed as a corporation. Option C is also false as a new LLC may change its tax classification at any time in the future.

Identify Which of the Following Statements Is True