LLC taxation can be:

• A. Business can choose to be taxed as corporation or pass through entity
• B. Must be taxed as a corporation
• C. Cannot be taxed as pass-through
• D. Taxed only at state level

Answer: (A)

LLCs have flexible taxation options. By default, they’re treated as pass-through entities for federal purposes, meaning the profits and losses flow to the owners and are reported on their personal tax returns, avoiding entity-level tax. However, an LLC can elect to be taxed as a corporation, such as a C corporation or an S corporation if eligible. This choice is made with IRS elections (for corporate taxation or S corp status). So the business can choose to be taxed as either a corporation or a pass-through entity.

The other statements don’t fit because they suggest a single, mandatory tax treatment or limit taxation to state level, which isn’t true at the federal level.