Which of the Following Statements Regarding the Process for Determining

question 96

Multiple Choice

Which of the following statements regarding the process for determining a partnership's tax year-end is true?

• A) Only the partners' profits interests are relevant when determining if a partnership has a majority interest taxable year.
• B) Under the principal partners test, a principal partner is defined as a partner having an interest of 3% or more in the profits or capital of the partnership.
• C) The least aggregate deferral test utilizes the partners' capital interests to measure the amount of aggregate deferral.
• D)A partnership is required to use a calendar year-end if it has a corporate partner.
• E)None of these

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Definitions:

Legally Sufficient Consideration

Value that the law recognizes as adequate to support a contract, ensuring that each party agrees to give or do something of value.

Economic Duress

A condition in which one is forced to engage in a financial transaction due to threats or pressures, rendering the agreement involuntary.

Irrevocable Offer

An offer that cannot be withdrawn or canceled by the offeror for a specified period, assuming the offeree has given some consideration in exchange for the offer's irrevocability.

Merchant

An individual or entity engaging in the selling of goods or services professionally or commercially.