A, B, and C Corp. form the ABC partnership. A and B are individual, cash method, calendar year taxpayers. C Corp is a small corporation that, over the last three years, has had average annual gross receipts in excess of $30 million. C Corp. is an accrual method taxpayer using a June 30 fiscal year. The partners share profits, losses and capital equally. 

1.The ABC partnership must choose a taxable year. If there were no constraints on this choice, what taxable year would  expect A to favor? C Corp?

2. What is ABC's “required taxable year” within the meaning of Sec. 444(e)?

3.ABC must also choose a method of accounting. Is it permitted to elect to use the cash method of accounting?

Answer rating: 100% (QA)

Solution 1 A being an individual cash method calendar year taxpayer would likely favor a taxable yea... View the full answer