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Chicago Illinois Form 966: What You Should Know
Step 3, LLC Disbandment / Liquidation — Profit & Small Business L.L.C. May 9, 2023 — What are the tax consequences of a corporation's liquidation? Will filing Form 966, which is called an LLC disestablishment liquidation and liquidation of the company, make any difference in the result? If yes, what can I expect to see? What about the filing of the L&P? A new form of business organization called the private limited company (p.l.c.) is emerging due to its low operating costs and low tax rate. By creating an LLC, you can reduce the amount of business income and expense that you have to report on Your Federal Tax Return. The LLC is a more flexible and permanent means of business organization and is more profitable for you. LCS have fewer limits on the number and location of owners and can use any type of property for the holding of their business. This reduces reporting requirements and provides some flexibility in where and with whom the business may do business. For example, LCS can operate as sole proprietorship, professional service firms, partnerships and similar entities. The tax rate on an LLC's income, losses, deductions, and credits is generally 10% and generally taxed at the LLC's regular tax rate. What Is A PLC, and What Are Its Limitations? The term “Limited Liability Company” (LLC) is a new category of business formation on business records that allows a business owner to own many LCS and each member of any one of the LCS may take control of that other member if that member becomes insolvent and goes out of business or ceases to exist. The IRS defines a PLC as a limited liability company with one or more members who elect to do business as a corporation (or similar business) for federal income tax purposes. LCS generally have different types of members and each member is typically limited in its responsibility and control. Is there any Tax advantage to Form 966 to dissolve an LFLC? No. The IRS does not view Form 966 as a tax form to dissolve an LFLC. Any information on Form 966, such as information about assets sold or exchanged, is information that would need to be reported to the IRS during an annual, quarterly, or monthly report.
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