Three Members Form an LLC in the Current Year

question 37

Multiple Choice

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

• A)The LLC's default classification under the check-the-box rules is as a partnership.
• B)The LLC can elect to have its default classification ignored.
• C)The LLC can elect to be taxed as a C corporation with no special tax consequences.
• D)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.

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Definitions:

Exercise

Physical activities undertaken to maintain or improve health and fitness.

Insomnia

A sleep disorder characterized by difficulty falling or staying asleep, affecting one's overall health and quality of life.

Unable

Incapable of doing something or functioning in a normal way.

Sleep

is a naturally recurring state of mind and body characterized by altered consciousness, relatively inhibited sensory activity, and inhibition of nearly all voluntary muscles.