Classification as disregarded entity for federal income tax purposes; treatment of certain conversions into a limited liability company.

Sec. 699. Notwithstanding any other provision of this act, both of the following apply: (a) A person that is a disregarded entity for federal income tax purposes under the internal revenue code is classified as a disregarded entity for purposes of parts 2 and 3 of this act. (b) A person that converts into a limited liability company under section 7 of 1883 PA 129, MCL 484.7, is treated as a corporation for purposes of parts 2 and 3 of this act unless that converted entity is a disregarded entity for federal income tax filing purposes under the internal revenue code and its regarded owner is treated as a corporation for state and federal income tax purposes.