XYZ, LLC, Has Several Individual and Corporate Members

question 80

Multiple Choice

XYZ, LLC, has several individual and corporate members.Abe and Joe, individuals with 4/30 year-ends, each have a 23 percent profits and capital interest.RST, Inc., a corporation with a 6/30 year-end, owns a 4 percent profits and capital interest, while DEF, Inc., a corporation with an 8/30 year-end, owns a 4.9 percent profits and capital interest.Finally, 30 other calendar year-end individual partners (each with less than a 2 percent profits and capital interest) own the remaining 45 percent of the profits and capital interests in XYZ.What tax year-end should XYZ use, and which test or rule requires this year-end?

• A)4/30, principal partners test.
• B)4/30, least aggregate deferral test.
• C)12/31, principal partners test.
• D)12/31, least aggregate deferral test.

---

Definitions:

Efficient Level

The optimal point of production or operation where costs are minimized and productivity or utility is maximized.

Warranty

A guarantee, usually made by a seller to a buyer, promising to repair or replace a product if necessary within a specified period.

High Quality

The standard of something as measured against other similar things, indicating it is of superior grade.

Signaling

The action of conveying information about oneself or one's intentions to others, often seen in economics and job markets where candidates signal their value through education or other credentials.