Question

PHOTO LLC is a joint marketing venture 80% owned by small retail photography stores. None of these members have a 5% interest in the LLC and there taxable years end in September, October, November and December in roughly equal proportions. The managing member of the LLC holds the remaining 20% interest with a taxable year ending March 31^st. What is the required taxable year for the LLC?

Answer 1

answer is 31st december

If one or more of the members with the same tax year own more than 50 percent of the LLC, their tax year is used. If no one owns a majority interest, the tax year of the principal members is used. If the principal members have different tax years, the LLC's tax year is the one that minimizes the amount of time that passes between the end of the LLC's tax year and the end of the member's various tax year.

  

In the given case no majority member's have same taxable year. Principal members who are having 5% , are having different taxable years. Hence the taxable year for photo LLC will be the minimimum amount of time that passes between the end of the LLC's tax year and the end of the member's various tax year.

December 31st is the taxable year for photo LLC it is the less time for all members.

From september to december is 3 months and from March to december is also 3 months. It is the only less timetime

thank you so much

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