Which of the following determines a partnership tax year for apartnership in which there is...

Which of the following determines a partnership tax year for a partnership in which there is neither a 50-percent-or-greater partner nor a majority of partners with a 5-percent-or-greater interest with the same tax year? A. Mathematical Aggregate Method B. Minimized Deferral Approach C. Least Aggregate Deferral Method D. Minimal Deferral Process

Expert Solution

Option C is correct

The required year is generally the tax year of the members who own in the aggregate more than 50 % of of the intrest and profits in the LLC.

This provision is called as majority interest rule. But If there is no member or combination of members with the same tax year owning more than 50% of profits and capital, the LLC’s required year is the tax year of its principal members. Principal members are those owning 5% or more of either profits or capital. This provision is called as the principal members rule. If neither of these rules applies, the LLC’s required year is the year end resulting in the least aggregate deferral of income to the members. This provision is called as the “least aggregate deferral” rule

ekkarill92 answered 2 years ago

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