e thr month d. The 15th day of the fourth montlh 14. Which of the following statement is false? A partnership is allowed to select a tax year different from its required tax year if it can establish to the IRS's satisfaction that a business purpose exists for using the requested tax year a. b, Generally, neither the partner nor the partnership recognize gain or loss on the contribution of property to the partnership in exchange for an interest in the partnership's capital and profits. The principal partners rule requires that the partnership adopt the tax used by the c. majority of its principal partners. d. In a general partnership all the partners are classified as "general partners," each of whom has unlimited liability for the debts of the partnership. True and False questions: 2 points each Since S corporations are corporations, they are subject to the accumulated earnings tax, personal holding company tax, and alternative minimum tax. a. True b. False 15. 16. If an S corporation's passive investment income is more that 25 percent of gross receipts for two consecutive tax years and the corporation has pre-S corporation earnings and profits at the end of each of those years, the corporation's S corporation status will be terminated. a. True b. False