U.S. Limited Liability Corporation Income Tax Returns

U.S. Limited Liability Companies (“LLCs”) can be treated, under U.S. internal law default rules, as partnerships or disregarded entities from a U.S. and state income tax perspective depending upon the number of owners. A U.S. LLC with two or more owners is treated, by default, as a partnership for U.S. and most state income tax purposes. A U.S. LLC with one owner is treated, by default, as a disregarded entity. The operations of an LLC treated as a disregarded entity are included on the tax return of the LLC’s owner. Rather than utilize the default treatment of a U.S. LLC (partnership or disregarded entity), the owners can alternatively elect on Federal Form 8832 to treat the LLC as a corporation for U.S. and most state income tax purposes. The election to change the treatment of an LLC (or a partnership) on Form 8832 can generally be made retroactive for up to 75 days.