Question

In regard to choosing a tax year for a business, which form of business provides the greater number of options in regard to the allowable tax year?

a.         A C corporation formed by two medical doctors to conduct their practice.

b.         A C corporation that is in the retail grocery business.

c.         A real estate partnership.

d.         An S corporation engaged in manufacturing.

e.         All of the above have the same options.

Answer 1

A tax year refers to the year covered by a tax return. It generally runs from 1 january to 31 december and includes taxes owed during this period. it is generally categorised as fiscal or calender year, and business taxes can be filed using a business year or fiscal year. it is an annual accounting period for keeping records, reporting income and expenses and withholding taxes. Internal revenue services allow the firms to use either fiscal or calender year except sole proprietors and single member LLCs, as they can only use calender year.

answer : option (e) all of the above have the same options.

all the options that is a, b ,c ,d are neither propietorship firm or single member LLCs. hence they have the option to select any tax year. hence all of the above firms have the options in regard to the allowable tax year.