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:

Production Process

The sequence of operations or activities involved in the manufacturing or creation of goods and services.

Employee Privacy

The rights of employees to have their personal information, activities, and communications kept confidential from unnecessary or unauthorized workplace surveillance or disclosure.

Three Square Market

A company known for microchipping its employees as a part of an advanced payment and identification system.

Microchip Implantation

The process of embedding a small semiconductor device or microchip under the skin, often for identification, tracking, or medical purposes.