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What are the disadvantages of operating as an LLC?
The benefits for owner-employees, such as health care or life insurance, are only partially deductible from these members’ individual federal income tax returns.
If you want your LLC to have a fiscal year other than a calendar year, a special election is required.
There is a legal requirement for a Limited Liability Company Agreement among its members. An attorney competent in corporate, contract and tax law should draft it. Tax treatment of the LLC as a corporation or partnership is going to be governed by the Agreement. And, regardless of the nature of the Agreement drafted, tax treatment is completely predictable only if you obtain a Private Letter Ruling from the Internal Revenue Service on a case-by-case basis.
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