blabla, Inc (a C Corporation) and jakie chang (a 65 year old individual Taxpayer) have reached an agreement to form jayjay, LLC. The new LLC will produce a new chocolate that jackie chang developed. blabla and chang each will own 50% of the LLC (both capital and profit/loss shares). As an individual, jackie chang has a December 31 year end. blabla, Inc has a June 30 year end. The new entity has elected to be taxed as a Partnership and, since its chocolate is popular all year long, it does not have a natural business year end. jayjay, LLC has hired your firm to provide tax advice and has asked the following.

Question I: What year end must jayjay, LLC use?

Question II: chang and blabla, Inc have also had discussion about the future of jayjay, LLC. chang is considering that after two years into the partnership he may be ready to retire and sell half of his interest (25%) in the LLC to blabla, Inc (making chang a 25% owner and blabla a 75% owner). jayjay, LLC wants to know if it can retain the taxable year determined in Part I if chang should sell half his interest to blabla, Inc.

Please research the Code, Regs, and possibly case law and respond to the above two questions. Please cite all references including all the laws and codes used to get the answers. Use the current codes and laws for 2018.