Which of the following is not true regarding a limited liability company?
A)The Code does not specifically provide for the taxation of limited liability companies.Therefore,an LLC that is taxed as a partnership must rely primarily on the tax provisions that apply to partnerships.
B)Under the "check the box" regulations,a domestic,two-owner unincorporated business organization,such as an LLC,is taxed as a partnership unless the owners elect otherwise.
C)An LLC offers several advantages over the S corporation,including not making the managing member of the LLC liable for self-employment taxes on his or her share of LLC income.
D)The economic benefits of an LLC may be reduced if lenders require owners to personally guarantee LLC debts.
E)In general,an LLC member is not personally liable for LLC debts.

Question

Quizplus · Accepted Answer

This statement is not entirely true. While it is true that an LLC offers advantages over an S corporation, including flexibility in management and not making the managing member liable for self-employment taxes, it is not entirely accurate to say that this benefit is exclusive to LLCs. S corporations also have the option of electing an officer as a "reasonable salary" employee, which can also reduce self-employment taxes for the owner.

Which of the Following Is Not True Regarding a Limited