• Is an S Election for an LLC Smart Planning or a Bad Idea?
  • September 11, 2016 | Authors: Jonathan R. Flora; Jon C. Hughes
  • Law Firm: Schnader Harrison Segal & Lewis LLP - Philadelphia Office
  • By default, a limited liability company (“LLC”) with two or more members is taxed as a partnership. It also is possible to elect to treat an LLC as an S corporation for income tax purposes. But is it a good idea? And if an S election is made, what could go wrong? As we explain below, an S election for an LLC is rarely a good idea, in part because of the many things that can go wrong. Instead, the preferred entity for use when making an S election is a state law corporation.