Three Members Form an LLC in the Current Year

question 32

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 be taxed as a C corporation with no special tax consequences.
• C) 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.
• D) The LLC can elect to have its default classification ignored.

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Definitions:

Criminal Act

An action or omission that constitutes an offense and is punishable by law.

Sexual Sadism

A condition in which individuals derive pleasure, especially sexual pleasure, from inflicting pain or suffering on others.

Sexual Masochism

A condition where sexual arousal and gratification depend on suffering pain or humiliation.

Transvestic Disorder

Paraphilic disorder in which a heterosexual man dresses in women’s clothing as his primary means of becoming sexually aroused.