Asked by Whitney Jefferson on Feb 18, 2024

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In an LLC,how are profits and losses reported?

A) on individual tax returns
B) on the corporation's tax return
C) on both the corporate and individual tax return
D) on either the corporate or individual tax return
  • Understanding the reporting of profits and losses in an LLC.
  • Differentiating between individual and corporate tax returns.
  • Identifying the potential options for reporting profits and losses.
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Verified Answer

MH
Mohammed Hisham

Feb 18, 2024

Final Answer :
A
Explanation :
In an LLC, profits and losses are not taxed at the corporate level. Instead, they are passed through to the individual tax returns of the LLC's owners, depending on their ownership percentage. This is known as pass-through taxation. Therefore, the correct choice is A.