I have formed an LLC with 3 members. When applying for an EIN, the IRS askes if I want to structure as partnership, s-corp or corp since this is required with a multi member LLC. which is the best option for tax purposes?
That depends on your personal situation. You and your partners should consult a professional tax advisor to determine the best selection for your circumstances.
Generally, an LLC acts like a corporation for legal protection reasons at the state level and for taxation purposes it is taxed as a partnership. In fact, an LLC will file a Form 1065 partnership return unless it elects these other forms of tax operations. In most cases, the default tax status of a partnership is the way to go. Having said that you should explore the facts of your operations and the tax possibilities with a tax attorney to be sure.
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It really depends on your circumstances. There is no set answer. I strongly suggest you and your partners individually and collectively consult with a tax attorney who can advise you on what is best for your situation.
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