Sarah, Sue, and AS Inc. formed a partnership on May 1, 20X9 called SSAS, LP. Now that the partnership is formed, they must determine its appropriate year-end. Sarah has a 30% profits and capital interest while Sue has a 35% profits and capital interest. Both Sarah and Sue have calendar year-ends. AS Inc. holds the remaining profits and capital interest in the LP, and it has a September 30 year-end. What tax year-end must SSAS, LP use for 20X9 and which test or rule requires this year-end?
A) 9/30, majority interest taxable year.
B) 12/31, majority interest taxable year.
C) 12/31, principal partners test.
D) 12/31, least aggregate deferral test.

Question

Quizplus · Accepted Answer

SSAS, LP uses the majority interest taxable year because all the calendar year partners together own more than 50% of the profits and capital interests in the partnership.