XYZ, LLC Has Several Individual and Corporate Members

question 68

Multiple Choice

XYZ, LLC has several individual and corporate members. Abe and Joe, individuals with4/30 year-ends, each have a 23% profits and capital interest. RST, Inc., a corporation with a 6/30 year end, owns a 4% profits and capital interest while DEF, Inc., acorporation with an 8/30 year end, owns a 4.9% profits and capital interest. Finally, thirtyother calendar year-end individual partners (each with less than a 2% profits and capital interest) own the remaining 45% 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) 12/31, least aggregate deferral test.
• B) 4/30, principal partners test.
• C) 12/31, principal partners test.
• D) 4/30, least aggregate deferral test.

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Definitions:

Four Years

A period equivalent to 48 months or the typical duration for completing an undergraduate degree.

Cross-sectional

A research method that involves examining data from a population at a single point in time to investigate relationships or outcomes.

Memory Test

An assessment method designed to evaluate an individual's ability to recall or recognize information.

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