Alabama Real Estate Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 400

How can an LLC choose to be taxed?

Only as a corporation

As a corporation or as a partnership

An LLC (Limited Liability Company) is a business structure that combines the benefits of a corporation and a partnership. This means that an LLC has the option to choose how it wants to be taxed. Option A is incorrect because an LLC can also choose to be taxed as a partnership. Option C is incorrect because all businesses are subject to some form of taxes. Option D is incorrect because an LLC is not a sole proprietorship and does not have to follow the tax regulations for that type of business. Overall, the correct answer B is the most accurate because it includes the two most common options for an LLC's tax status.

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Not subject to taxes

As a sole proprietorship only

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