Research Problem 2. Barney Chang and Aldrin, Inc., a domestic C corporation, have decided to form BA
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Research Problem 2. Barney Chang and Aldrin, Inc., a domestic C corporation, have decided to form BA LLC. The new entity will produce a product that Barney recently developed and patented. Barney and Aldrin each will own a 50% capital and profits interest in the LLC. Barney is a calendar year taxpayer, and Aldrin is taxed using a June 30 fiscal year-end. BA does not have a “natural business year” and elects to be taxed as a partnership.
a. Determine the taxable year of the LLC under the Code and Regulations.
b. Two years after formation of BA, Barney sells half of his interest (25%) to Aldrin.
Can BA retain the taxable year determined in part (a)? Why or why not?
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Related Book For
Essentials Of Taxation Individuals And Business Entities
ISBN: 233160
1st Edition
Authors: Nellen/Young/Raabe/Maloney
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