42.9.502 DISREGARDED ENTITIES – SOURCING GAIN OR LOSS ON THE SALE OF AN INTEREST
(1) Gain on the sale of an interest in a single member limited liability company (LLC) that is a disregarded entity is sourced to Montana as if the single member LLC did not exist and the assets of the LLC are owned directly by the sole member (or sole member and spouse, if applicable). The following example illustrates how this rule is applied:
(a) Nonresident individual C is the sole member of LLC D. LLC D is a single member LLC that is disregarded as a separate entity for tax purposes. LLC D's only asset is rental property located in Montana. If nonresident individual C sells his interest in LLC D, the transaction is sourced to Montana in the same way that the gain would be sourced if C owned LLC D's assets directly and sold them.
History: 15-1-201, 15-30-2620, MCA; IMP, 15-30-2101, 15-30-2110, 15-30-3302, 15-30-3311, MCA; NEW, 2011 MAR p. 2679, Eff. 12/9/11.