Dissolve Business - Remaining Inventory - Tax Forum - Tax Help Forum, Payroll Tax Forum, Business Tax Forum, Tax Questions, Free Tax Advice

elisa751 · 11-14-2009, 08:07 PM

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In a LLC business partnership, where both partners want to dissolve the company but the partners are not on speaking terms and deadlocked. There still a small amount of inventory left in the company. How does this effect the businesses tax return. What can be done with the remaining inventory. What is the best way to dissolve the company with minimal tax liability.

Skyhawk · 11-15-2009, 09:00 PM

Is the business an LLC that has elected, or defaulted, to be treated as a partnership for tax purposes? If it is see IRC (the tax code) section 751. In essence each partner is treated (deemed) as if he/she received a proportionate share of the partnership assets, e.g. inventory, office equipment, etc. This is so even if the actual distributions are not according to the partnership percentage owned. This is a very complex area of tax law and a tax professional, such as a CPA or enrolled Agent, should be consulted.