Businesses Were Separate and Distinct and Could Use Different Accounting Methods.

A corporation's former subsidiary business converted to an LLC with the corporation as it's sole member and the IRS determined that the businesses were separate and distinct trades or businesses under I.R.C. Sec. 446(d) because they were engaged in different activities, had separate books, separate records, were not located near each other and did not share employees except for top-end executives.  Thus, the businesses could use different accounting methods for each of the different businesses.  There was not creation or sharing of profits and losses between the businesses, and income of the businesses was clearly reflected.   This was the case even though the LLC did not elect to be taxed as a corporation and, as a result, was a treated for tax purposes as a division of the corporation.  C.C.A. 201430013 (Mar. 24, 2014).