In October, Y1, T (a cash basis, calendar-year taxpayer), a member of the STUV LLC (an accrual basis, October 31 fiscal year partnership for tax purposes), performs nonrecurring legal services for the LLC. T is paid $40,000 (the fair value of the services) by the LLC on January 10, Y2. If the services were performed in the capacity of someone who is not a partner, when would T include the $40,000 as income, and when would STUV deduct it?
a. T would include it in Y2 and STUV would deduct it in FYE October 31, Y2.
b. T would include it in Y2 and STUV would deduct it in FYE October 31, Y1.
c. T would include it in Y1 and STUV would deduct it in FYE October 31, Y1.
d. T would never have to include the $40,000 in income.