Delaware LLC federal tax classification
The four federal tax classification options for Delaware LLCs: disregarded entity, partnership, S corporation, C corporation.
Definition
Federal tax classification options for Delaware LLCs: (1) Single-member default: disregarded entity (flow-through to owner). (2) Multi-member default: partnership (flow-through to members). (3) S corporation: via Form 2553 (US citizens/residents only). (4) C corporation: via Form 8832.
Context
Default classifications work for most non-resident bootstrap LLC operations.
Example
A non-resident-owned single-member Delaware LLC defaults to disregarded entity. The LLC files Form 5472 plus pro forma 1120 (informational); no separate LLC-level tax.
Common pitfalls
- Switching classification has tax consequences.
- Non-residents cannot elect S corp.