If a Partnership Chooses to Form an LLC, Under the Check-The-Box

question 66

Multiple Choice

If a partnership chooses to form an LLC, under the check-the-box rules, and assuming no elections are made, the entity will be taxed as

• A)a partnership if it has more than one member.
• B)an S corporation.
• C)a C corporation.
• D)Unable to determine from the facts presented.

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Definitions:

CCA Class

Capital Cost Allowance Class, a categorization in tax systems for depreciation of tangible property.

Tax Rate

The proportion of income or value of goods taxed by the government, applicable to individuals, corporations, and transactions.

Operating Cash Flow

The cash generated from the normal operating activities of a business, reflecting the amount of cash that a company can produce through its normal business operations.

Capital Cost Allowance

A tax deduction in many tax systems for businesses, allowing them to depreciate the cost of assets over time.