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.

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Definitions:

Gas Exchange

The process by which oxygen is taken in and carbon dioxide is released out, occurring in the lungs and tissues or in the cells and environment for organisms.

Transpiration

The process by which plants absorb water through the roots and then give off water vapor through pores in their leaves.

Perspiration

The process of sweating, through which the body releases excess heat and water.

Transduction

A process in genetics where bacterial DNA is transferred from one bacterium to another by a virus.