Alabama Real Estate Practice Exam

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Prepare for the Alabama Real Estate Exam. Utilize flashcards and multiple-choice questions, each coupled with hints and explanations. Ace your upcoming test!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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How can an LLC choose to be taxed?

Only as a corporation
As a corporation or as a partnership
Not subject to taxes
As a sole proprietorship only

The correct answer is: As a corporation or as a partnership

An LLC (Limited Liability Company) is a business structure that combines the benefits of a corporation and a partnership. This means that an LLC has the option to choose how it wants to be taxed. Option A is incorrect because an LLC can also choose to be taxed as a partnership. Option C is incorrect because all businesses are subject to some form of taxes. Option D is incorrect because an LLC is not a sole proprietorship and does not have to follow the tax regulations for that type of business. Overall, the correct answer B is the most accurate because it includes the two most common options for an LLC's tax status.