Which of the following statements is (are) correct?
I.Critter Partnership may elect to use any of the three dates that the partners use.
II.Critter Partnership must use the tax year of the partner that creates the least amount of deferral.
a.Only statement I is correct.
b.Only statement II is correct.
c.Both statements are correct.
d.Neither statement is correct.
-Snoopy Corporation,Garfield Corporation,and Dogbert Corporation are partners in Comic Partnership.The partners' fiscal year ends and ownership interests follow:
$\begin{array}{lll}
\text { Snoopy Corporation } & \text { March 31 FYE } & 15 \% \text { Interest } \
\text { Garfield Corporation } & \text { May 31 FYE } & 30 \% \text { Interest } \
\text { Dogbert Corporation } & \text { October 31 FYE } & 55 \% \text { Interest }
\end{array}$
I.Comic Partnership must use a calendar year end,unless the IRS approves an election for a different tax year.
II.Comic Partnership must use a October 31 fiscal year end.

Question

Quizplus · Accepted Answer

A1. Statement II is correct because a partnership must generally use the tax year of the partner that creates the least amount of deferral, not any date the partners use.2. Statement I is correct because a partnership must use a calendar year unless it can justify a different fiscal year to the IRS, and the majority interest tax year rule does not apply here as no partner has more than 50% interest.

Which of the Following Statements Is (Are) Correct? I IComic Partnership Must Use a Calendar Year End,unless the IRS

Which of the Following Statements Is (Are) Correct?
I IComic Partnership Must Use a Calendar Year End,unless the IRS