txx5768

1. 1)Which of the following statements is false?

   A.	Most individuals are cash basis, calendaryear taxpayers.
   B.	When a new business entity acquires real estate, an opportunity for some tax planning emerges because the new entity may select its tax accounting method (cash vs accrual)and accounting period (calendar or fiscal year).
   C.	Business entity taxpayers have almost unfettered discretion to choose the accounting method and accounting period that benefits the entity and its owners the most.
   D.	All of the above are true.

1. 2)Which of the following statements is false?

   A.	APartnership isprohibited by the Tax Codefrom having a fiscal tax year (a tax year other than a calendar year).
   B.	One way anS corporation may establish a fiscal tax year is by establishinga legitimate business purpose for the fiscal accounting year.
   C.	If an S corporation cannot establish a legitimate business purpose to have a fiscal year, the S corporation may still have a fiscal yearif they meet the requirementsand make a IRC444 election.
   D.	All of the above are true.

1. 3)Which of the following is NOT a condition an entity must meet in order to make a valid election underIRC444?

   A.	The taxpayer/entity may not be a member of a tiered structure (except for an immateriality exception).
   B.	The taxpayer/entity did not previously have an election under IRC444 in effect.
   C.	The elected tax year results in a deferral of less than six months.
   D.	All of the above are correctly stated requirements for an entity to make a valid IRC444 election.