XYZ Limited Liability Company (LLC) generated 20X1 net income from operations of $250,000. At the end of said taxable year, the LLC distributed $40,000 to each of its two (2) members, who each own a 50% interest in the LLC.

What is the tax liability for the LLC and for the two (2) members, if the LLC has a taxation election as a Partnership?

Select one:

a. The LLC will file a Pass-Through Entity Income Information Return and will pay taxes for the $250,000. Each member will pay taxes for the amount of $125,000 as the LLC's attributable income on their Individual Income Tax Return.

b. The LLC will file a Pass-Through Entity Income Information Return and report that it generated a net operating income of $250,000. Each member will pay taxes for the $40,000 distributed in their Individual Income Tax Returns.

c. The LLC will file a Pass-Through Entity Income Information Return and report that it generated a net operating income of $250,000. Each member will pay taxes for the amount of $125,000 as the LLC's attributable income on their Individual Income Tax Return.

d. The LLC will file a Pass-Through Entity Income Information Return and will pay taxes for the $250,000. Each member will pay taxes for the $40,000 distributed in their Individual Income Tax Returns.