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67 Taxes 339 (1989)
Miami Device: The Florida Limited Liability Company

handle is hein.journals/taxtm67 and id is 345 raw text is: Miami Device: The Florida
Limited Liability Company

The author evaluates Florida limited liability
companies in view of the IRS's revenue ruling
indicating that such companies will be
classified as partnerships for federal income
tax purposes.

Alan S. Lederman is a
shareholder of the Miami,
Florida low firm of Greenberg,
Traurig, Hoffman, Lipoff,
Rosen & Quentel, P.A.
@ 1989, Alan S. Lederman

A limited liability company (LLC), like a
corporation, offers its equity investors protection
from personal liability for obligations of the
entity. In Rev. Rul. 88-76,1 the IRS ruled that an
LLC can be classified as a partnership for federal
income tax purposes and thus, unlike a C corpora-
tion, can avoid federal corporate-level tax and
pass through profits and losses to its members.
Unlike an S corporation, an LLC has no limita-
tion on eligibility of equity investors; and because
an LLC member's tax basis in his membership
interest includes his share of the LLC's liabilities,
a potentially larger basis for the pass-through
of tax losses exists. Investors seeking limited
liability, the absence of federal corporate-level
tax, and the pass-through of tax losses may now
consider utilizing LLCs to operate their busi-
ness ventures.
Florida Law Aspects
At present, only two states, Florida and
Wyoming, provide for the creation of LLCs.2 The
following discussion of the state law aspects of
LLCs is based on the Florida Limited Liability
Company Act. The Wyoming Limited IUability
Company Act is virtually identical.
1 1. R. B. 1988-38, 14.
2 F. S. A. Ch. 608; Wyo. Stat., Title 17, Ch. 15.

TAXES-The Tax Magazine

June, 1989

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