Dori and Matt will be equal owners of a new business and will be making cash contributions to start up the business.They expect substantial losses in the early years so the business will take out a loan from the bank which Dori and Matt will have to guarantee.For tax purposes,the preferred business form for these early years will be
A)a C corporation.
B)an S corporation.
C)an LLC,taxed as a partnership.
D)either an S corporation or an LLC (partnership).The owners will be indifferent between these two forms.

Question

Quizplus · Accepted Answer

An LLC taxed as a partnership allows Dori and Matt to pass through the substantial losses to their personal tax returns, potentially offsetting other income. This is beneficial in the early years when losses are expected.

Dori and Matt Will Be Equal Owners of a New