LLCs & PCs

Generally
A Limited Liability Company is a statutory business that may be treated as a corporation, a partnership, or a sole proprietorship for tax purposes.

As a result, to determine the tax implications of LLC-purchased Long-Term Care Insurance, one must first determine by which method the LLC is treated for federal income tax purposes.

Thus it follows:

  • A LLC treated as Sole Proprietorship would look to the Sole Proprietor regulations for guidance;
  • A LLC treated as a Partnership would look to the Partnership regulations for guidance; and
  • A LLC treated as a Corporation would look to the Corporation regulations for guidance.

Professional Corporations/ Professional Associations (PCs/PAs)

Generally
Professional Corporations and Associations have the ability to select the method by which the entity will be treated for federal income tax purposes.

Generally, Professional Corporations may elect to be treated as either a C-Corporation or an S-Corporation. The status is elected by the entity.

As a result, to determine the tax implications of PC-purchased Long-Term Care Insurance, one must first determine by which method the PC is treated for federal income tax purposes.

Thus it follows:

  • A PC treated as C-Corporation would look to the C-Corporation regulations for guidance; and
  • A PC treated as an S-Corporation would look to the S-Corporation regulations for guidance.

We do not provide tax or legal advice. Any decisions whether to implement these ideas should be made by the client in consultation with professional financial, tax, and legal counsel.

The information on this site is intended for informational purposes only and does not constitute legal advice. To comply with IRS rules, we must inform you that if this site contains advice relating to federal taxes, it was not intended nor written to be, and cannot be, used for the purpose of avoiding penalties that may be imposed under federal tax law. Under these rules, a taxpayer may rely on professional advice to avoid federal tax penalties only if that advice is reflected in a comprehensive tax opinion that conforms to stringent requirements under federal law.