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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 By ALAN S. LEDERMAN 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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