In a recent Tax Court case, a taxpayer learned a fundamental lesson about single-member limited liability companies the hard way. The taxpayer had carried out a transaction intended to create a tax benefit making use of a limited liability company (an “LLC”) that he thought was taxable as a partnership. As it turned out, however, the LLC, which the taxpayer thought was a two-member LLC, was treated as a single-member LLC for federal income tax purposes and none of the partnership tax benefits that the taxpayer had planned for were available.