Shyster1040 wrote:

- quote -

Thanks. Your answer was clear and explicit and completely
answers my question.

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taxxcpa wrote:

- quote -

I have not looked it up for you, given this time of the
year, but my gut feeling is that this is like section 179
election, to be made at entity level.

What say others?

ChEAr$,
Harlan Lunsford, EA n LA

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The election must be made by the partnership. See Code Sec.
703(b), which provides that all elections affecting the
computation of taxable income derived from a partnership are
made by the partnership except the following elections:
1) under Sec. 108(b)(5) or 108(c)(3);
2) under Sec. 617; or
3) under Sec. 901.

The elections listed in 1) - 3) are made by each partner
separately.

Since an election under Sec. 451(e) is not on that list, it
must be made by the partnership.

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Under Section 451(e) of the IRC gains on sale of livestock
due to drought can be postponed under involuntary conversion
rules.

My question is whether this election would have to be made
at the LLC level or could each LLC member make the election
separately based on his share of the gain as reported on his
K-1.?

I am preparing the LLC tax return and the personal returns
of one LLC member. In his case, due to other expenses,
losses, etc., he would be better off NOT electing to
postpone the gain. In the event the other 50% owner wants to
postpone his share, I would like to know if each LLC member
is able to decide to make different choices.

I would appreciate any comments, answers or suggestions.

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