Accounting Period

Question 1

In general, if taxpayers change their accounting period, the change requires:

Answer 1

I. prior IRS approval.

II. a short-period tax return.

Question 2

In the absence of an election to adopt an annual accounting period, the required tax year for a partnership is:

Answer 2

a tax year of one or more partners with a more than 50% interest in profits and capital.

Question 3

One of the elections a new corporation must make is its choice of an accounting period.What entities has the most flexibility in choosing an accounting period?

Answer 3

C corporation

Question 4

In calculating the tax of a corporation for a short period, what is the process

Answer 4

Annualize income and calculate the tax on annualized income, then multiply the computed tax by the number of months in the short period divided by 12.

Question 5

What taxpayers is required to use a calendar year?

Answer 5

A taxpayer that keeps no records

Question 6

A newly-formed partnership generally must adopt a tax year that:

Answer 6

conforms to the predominant tax year of their partners

Question 7

Annualization is required for a short tax period to ensure

Answer 7

the appropriate annual marginal tax rate applies.

Question 8

A tax year generally must end on the last day of a month, except in the case of a:

Answer 8

52- or 53-week year.

Question 9

What entities may adopt any tax year-end?

Answer 9

C corporation