Which of the Following Statements Is Incorrect About LLCs and the Check-The-Box

question 30

Multiple Choice

Which of the following statements is incorrect about LLCs and the check-the-box Regulations?

• A)If a limited liability company with more than one owner does not make an election, the entity is taxed as a corporation.
• B)All 50 states have passed laws that allow LLCs.
• C)An entity with more than one owner and formed as a corporation cannot elect to be taxed as a partnership.
• D)If a limited liability company with one owner does not make an election, the entity is taxed as a sole proprietorship.
• E)A limited liability company with one owner can elect to be taxed as a corporation.

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Definitions:

Annuity Due

An annuity due is a type of annuity payment where payments are made at the beginning of each period, rather than at the end, as in an ordinary annuity.

Perpetuity

An infinite series of equal payments at equal intervals of time.

Present Value

The present-day value of a sum of money to be received in the future or a series of future cash flows, based on a certain return rate.

Cash Flow

A financial measurement that shows the net amount of cash and cash-equivalents being transferred into and out of a business over a specified period.