Skylark, Inc., a calendar year general contractor, and Teal, Inc., a development corporation with a March 31 year-end, formed the equal ST LLC on January 1 of the current year. Both LLC members are C corporations. The LLC was formed to construct and lease retail centers in Seattle.
Skylark contributed cash of $1.2 million and equipment (basis and fair market value of $800,000). Teal contributed land (basis of $300,000, fair market value of $600,000) and cash of $1.4 million. The cash was used as follows egal fees for drafting the LLC operating agreement $ 10,000 Materials and labor costs for construction in progress on retail centers 2,500,000 Office expenses (utilities, rent, overhead, etc.) 90,000 What issues must the LLC address in preparing its initial tax return?