LLCs taxed as disregarded entities. Law Offices of Kiritsis & Associates 21`2 922 0005.
A common misconception about LLC (Limited Liability Company) disregarded entities, is that they are the functioning equivalent of a solo proprietorship.
Major PointsIt is of paramount importance, to understand the following core concept as it pertains to single member LLCs -- they may only be considered a disregarded entity for federal income taxation purposes. It is worth mentioning that international tax law, may not necessarily treat a single member LLC as a disregarded entity.
Advanced IssuesMulti member Limited Liability Companies, are NOT taxed as disregarded entities. Nowadays, State tax law statutes, treat single member LLCs as disregarded entities, in a very similar fashion as its federal income tax law counterparts.