Once a Corporation Has Elected a Taxable Year,it Can Change

question 29

Multiple Choice

Once a corporation has elected a taxable year,it can change the taxable year without IRS permission if

• A)the resulting short period does not have a net operating loss.
• B)the corporation has not changed its accounting period within the last ten years.
• C)the annualized income for the short period is at least 80% of the corporation's income for the preceding taxable year.
• D)All of the above conditions must be met.

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Definitions:

Present Value

The value today of a sum of money to be received in the future, after accounting for a certain return rate.

Compound Interest

Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. It's the result of reinvesting interest rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously accumulated interest.

Earnings Rate

The return on an investment for a specific period, typically expressed as a percentage of the investment's initial cost.

Internal Rate Of Return

A financial metric used to evaluate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows from a project equal to zero.