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:

Product Offerings

The various products and services a company makes available to customers.

Position

Refers to a brand's or product's unique standing and identity in the marketplace relative to its competitors.

Consumers

Individuals or organizations that use economic services or commodities.

Dumping

the practice of exporting goods to another country at a price below the normal charge in the home market, often considered unfair competition.