Mr.John director of tax group just finished a meeting with new client, Mr. Rocky who desires to start a new landscaping business. Mr.John has adviced Mr.Rocky that he should organize a limited liability company because it offers the protection of limited liability and many tax advantages. However, Mr.John neglected to ascertain whether Mr.Rocky intends to start the business by himself or go into business with others.

1) How will Mr. Rocky be required to report his LLC opeartion on feferal tax return if he goes into business by (a) himself or (b) with others.

2) For federal tax purpose, how will Mr. Rocky LLC treated (in the case of a single member LLC and a multi-member LLC). How can the LLC elect to be treated for federal tax purposes assuming a timely election? What are the advanatges and disadvnatges of each type of tax treatment.