Sally Is a Calendar-Year Taxpayer Who Owns a 30% Capital

question 99

Multiple Choice

Sally is a calendar-year taxpayer who owns a 30% capital and profits interest in the SEM Partnership. Eric sells the remaining 70% capital and profits interest to Michelle on October 3. The partnership year-end is March 31 as permitted by the IRS for business purposes. Which of the following statements is correct?

• A)Sally must conform her tax year with the partnership tax year.
• B)The new partnership is a continuation of the old partnership.
• C)Sally's tax return will include a partnership distributive share only for the period ending March 31.
• D)Sally's tax return will include partnership distributive shares for periods ending March 31 and October 3.

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