XYZ, LLC, Has Several Individual and Corporate Members

question 61

Multiple Choice

XYZ, LLC, has several individual and corporate members. Abe and Joe, individuals with 4/30 year-ends, each have a 23percent profits and capital interest. RST, Incorporated, a corporation with a 6/30 year-end, owns a 4percent profits and capital interest, while DEF, Incorporated, a corporation with an 8/30 year-end, owns a 4.9percent profits and capital interest. Finally, 30 other calendar year-end individual partners (each with less than a 2percent profits and capital interest) own the remaining 45percent 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:

Thematic Apperception Test

A projective psychological test that asks respondents to interpret ambiguous images, used to explore their emotions, thoughts, and attitudes.

Progressive Matrices

A type of IQ test that measures abstract reasoning, independent of verbal ability, using patterns with missing pieces that test takers must identify.

Clinical Scales

Tools or instruments used by clinicians to assess, measure, and quantify symptoms, abilities, or conditions.

MMPI-2

A widely used standardized psychometric test of adult personality and psychopathology used to assist with the diagnosis of mental disorders.