Entity Classification

Question 1

Entity Classification:

What are Check-the-Box Regulations?

Answer 1

Check-the-box allows taxpayers to choose the tax status of an unincorporated entity without regard to corporate or noncorporate characteristics.

Question 2

Entity Classification:

How can an entity with more than one owner be classified?

Answer 2

Entities with more than one owner can elect to be classified as a partnership or a corporation (default classification is partnership).

Question 3

Entity Classification:

How can an entity with one owner be classified?

Answer 3

Entities with only one owner are, by default, disregarded entities.

• Disregarded entities are treated as a sole proprietorship if owned by an individual or as a branch or a division of a corporate owner.