1) Complete the following activity. In 2014, Prince Frank, Joe and Nord, Inc, formed the Candy Co,...
Question:
1) Complete the following activity.
In 2014, "Prince" Frank, Joe and Nord, Inc, formed "the Candy Co, LLC". At formation, the entity did not file Form 8832. For 2041 and therefore, the Candy Co LLC was taxed as a partnership and filed its return with a 12/31 year-end based on the majority interest rule.
- The parties are unrelated
- Frank's tax year ends 12/31
- Joe's tax year ends 12/31
- Nord's Inc's tax year end is 11/30.
Their ownership interests are as follows:
- Frank: 30%
- Joe: 50%
- Nord, Inc: 20%
The Candy Co LLC sells all sorts of delicious candy that is sourced from around the world. Typically, Candy Co LLC has a "busy season" prior to Christmas and Easter. At the time of formation, the Candy Co LLC's year-end was 12/31. On May 15, 2021, Joe formed AO Inc. as a C corporation and transferred all of his interest in the Candy Co LLC into AO Inc. It selected May 31 as its year-end.
The Candy Co LLC has the following gross receipts:
2018 | 2019 | 2020 | 2021 | 2022 | |
January | 150,000 | 159,000 | 169,000 | 179,000 | 189,000 |
February | 209,000 | 109,000 | 119,000 | 159,000 | 169,000 |
March | 300,000 | 90,000 | 95,000 | 99,000 | 104,000 |
April | 120,000 | 126,000 | 132,000 | 139,000 | |
May | 210,000 | 221,000 | 232,000 | 243,000 | |
June | 315,000 | 331,000 | 347,000 | 365,000 | |
July | 105,000 | 110,000 | 116,000 | 122,000 | |
August | 124,000 | 129,000 | 134,000 | 160,000 | |
September | 140,000 | 148,000 | 152,000 | 161,000 | |
October | 190,000 | 198,000 | 175,000 | 178,000 | |
November | 190,000 | 198,000 | 175,000 | 178,000 | |
December | 190,000 | 198,000 | 165,000 | 218,000 |
- What year end(s) can the partnership choose for 2023?
- What year end must the partnership use for 2023?
South Western Federal Taxation 2016 Corporations Partnerships Estates And Trusts
ISBN: 9781305399884
39th Edition
Authors: James Boyd, William Hoffman, Raabe, David Maloney, Young