Doug, Kate, and Gabe own Refiner Group, Inc., an electing S corporation. The shareholder's ownership percentages and fiscal year ends follow:
Which of the following statements is (are) correct?
$$\begin{array} { l l l }
& \text { Ownership } & \text { Year End } \
\text { Doug } & 60 \% & \text { January } 31 \
\text { Kate } & 20 \% & \text { May } 31 \
\text { Gabe } & 15 \% & \text { September } 30
\end{array}$$
I.Refiner Group, Inc. must use a calendar year.
II.Refiner Group, Inc. may elect to use a fiscal year ending January 31.
?

Question

Doug, Kate, and Gabe own Refiner Group, Inc., an electing S corporation. The shareholder's ownership percentages and fiscal year ends follow:
Which of the following statements is (are) correct?
$$\begin{array} { l l l } 
& \text { Ownership } & \text { Year End } \
\text { Doug } & 60 \% & \text { January } 31 \
\text { Kate } & 20 \% & \text { May } 31 \
\text { Gabe } & 15 \% & \text { September } 30
\end{array}$$
I.Refiner Group, Inc. must use a calendar year.
II.Refiner Group, Inc. may elect to use a fiscal year ending January 31.
?

Quizplus · Accepted Answer

Since all shareholders have a calendar year-end, Refiner Group, Inc. is required to use a calendar year as its fiscal year-end. Therefore, statement I is incorrect. Statement II is incorrect because the corporation cannot elect to use a fiscal year different from the calendar year when all shareholders have a calendar year-end.

Doug, Kate, and Gabe Own Refiner Group, Inc IRefiner Group, Inc