Jon Avery starts an unincorporated business on December 1, 2020. Which of the following statements is correct with respect to Jon's taxation year end?

Question

Quizplus · Accepted Answer

As an unincorporated business, Jon has the option to select any date for his taxation year end. However, if he chooses a non-calendar year end, he will have to adjust his income by an amount referred to as "additional business income". This adjustment is required to ensure that Jon's income is reported on the same basis as a calendar year taxpayer. Therefore, Option C is correct. Option A and B are incorrect as there is no requirement for Jon to select a specific month as his taxation year end. Option D is also incorrect as there is no requirement for Jon to report income for his first two fiscal years in his 2021 tax return.

Jon Avery Starts an Unincorporated Business on December 1, 2020