ABC, LLC is equally-owned by three corporations.Two corporations have June 30 fiscal year ends, the third is a calendar-year taxpayer.ABC will use a June 30 year end under the majority partners' tax year rule because more than 50% of the partnership's capital and profits is owned by partners with the same taxable year.

Question

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According to the majority partners' tax year rule, a partnership must adopt the tax year of the majority partners who own more than 50% of the capital and profits. In this case, since two out of the three corporations have a June 30 fiscal year-end, they are considered the majority partners, and therefore ABC, LLC will have a June 30 year-end.

ABC, LLC Is Equally-Owned by Three Corporations