From a tax perspective, which entity choice is preferred when a liquidating distribution occurs and the entity has appreciated assets?
A) Partnership
B) S corporation
C) LLC
D)Partnership and LLC
E)S corporation and LLC

Question

Quizplus · Accepted Answer

Partnerships and LLCs (treated as partnerships for tax purposes) allow for a step-up in basis of the distributed assets, potentially avoiding double taxation on appreciated assets during liquidation.

From a Tax Perspective, Which Entity Choice Is Preferred When