Question: three members form an LLC in the current year. Which of the following statements is incorrect? The LLC's default classification under the check-the-box rules is

three members form an LLC in the current year. Which of the following statements is incorrect?

The LLC's default classification under the check-the-box rules is as a partnership.

The LLC can elect to have its default classification ignored.

The LLC can elect to be taxed as a C corporation with no special tax consequences.

If the LLC elects to use its default classification, it can elect to change its status to being taxed as a C corporation beginning with the third tax year after the initial classification.

Step by Step Solution

★★★★★

3.52 Rating (155 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

C The LLC can elect to be taxed as a C corporation with no special tax consequences Although an LLC ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Which of the following statements is incorrect A domestic subsidiarys earnings are taxed in the year earned A foreign corporations less than 50 ownership are not taxed until repatriated All of a...

Under absorption costing, which of the following statements is not true? A. variable inventory costs are treated in the same manner as they are under variable costing B. all manufacturing costs are...

Which of the following statements is incorrect regarding manufacturing overhead? a. Manufacturing overhead is an indirect costs to units or products. b. Manufacturing overhead includes both fixed and...

IN THE UNITED STATES, THE RATE AT WHICH corporations are taxed ranges from 15 to 35 percent, depending on the size of their income. Thats a higher top marginal tax rate than in any other developed...

Dorchester, Ltd. is an old-line confectioner specializing in high-quality chocolates. Through its facilities in the United Kingdom, Dorchester manufactures candies that it sells throughout Western...

R& D Inc. has the following financial data for the current year (millions): Earnings before R& D expenditures.......... $ 21.5 Interest expense................ $ 0.0 R& D expenditures...................

Starboard, Inc., has a board of directors consisting of three members, Ellsworth, Green, and Morino. The corporation has approximately five hundred shareholders. At a regular meeting of the board,...

Read again the Real World Case. As an investor in the company, what further information would you need to help you form an opinion on the liability to suppliers? Data from Real World Case EasyJet...

Despite the repeated effort by the government to reform how Wall Street pays its executives, some of the nations biggest banks are continuing to pay out bonuses nearly as large as those in the best...

Fill in the blanks to make the following statements correct. a. Suppose you earn an annual income of $22 500 and you paid a total of $3600 in taxes. Your aver- age tax rate is _______. b. Suppose you...

2. Let P and Q be positive odd coprime integers. Prove that -1Q-1 m+ 2 2 m

Listed below are the arrival delay times (in minutes) of randomly selected American Airline flights from New Yorks JFK airport to Los Angeles (LAX). Negative values correspond to flights that arrived...

Evaluate the following limit: lim h 0 l n ( 1 h ) - l n ( 1 ) h ( A ) 1 x ( B ) l n ( x ) ( C ) 0 ( D ) 1 . ( E ) The limit does not exist

Let f: [a, b] R be integrable. Suppose there exists & > 0 such that f(x) > 8 for all [a, b). 1 Prove that : [a, b] R is integrable.

When a vehicle is traveling with a speed of V= 12 (m/ s it jumps over t at a speed of v 20 (m /s) Move a winter standing on the ground The angle of the stone throw with the car surface1, as it...

Given the circuit in Fig. 14.70, R, = 2 , R2 = 5 0, C = 0.1 F, and C2 = 0.2 F, determine the transfer function H(s) = v,(s)/V(s). R2 ww ww-

(iii) On an isolated network, two hosts with IP addresses 128.129.130.131 and 128.129.150.151 share a common 255.255.224.0 subnet mask. Can the two hosts communicate directly with each other? Justify...

Rusk Corporation sells 185,000 gallons of paint annually at several retail outlets. The ordering cost per order is $75, and its cost of capital is 10%. The storage and handling cost for paint is $2...

and its time-consuming nature (Joris et al., 2015), before suggesting automated approaches are suggested as an easier and more reliable alternative (Joris et al., 2015). The chapter moves on to...

Need it Page 03 Page 04 1) Which of the following statements regarding proposed regulations is not correct? A. Proposed and temporary regulations are generally issued simultaneously. B. Practitioners...

Regulations are A. equal in authority to legislation if statutory B. equal in authority to legislation C. presumed to be valid and to have almost the same weight as the IRC D. equal in authority to...

LLC net income and statement of members equity marvel media, LLC, has three members: WLKT partners LLC Net Income and Statement of Members' Equity Marvel Media, LLC, has three members: WLKT Partners,...

"GAMERUSH"ASSESSMENT QUESTION 2014 You and four other friends, Joan, David, Albert, and Alice went to separate institutions to pursue educations after high school. Joan attended Harvard where she...

Starting a Business/Creating an LLC The process of starting a business is extremely timeconsuming. A successful entrepreneur is aware that careful attention to legal issues is an essential component...

Please Help with this Hypothetical 1065 Tax Return.. Form 1065 Due Thursday, November 12 by 5:00 PM CST US Check Figures - Form 1065 Page 1, Line 22 (Ordinary Business Income) - $156,275 Page 5, Line...