In what order should the tests to determine a partnership's year end be applied?
A) principal partners test - majority interest taxable year - least aggregate deferral.
B) majority interest taxable year - least aggregate deferral - principal partners test.
C) majority interest taxable year - principal partners test - least aggregate deferral.
D) principal partners test - least aggregate deferral - majority interest taxable year.
E) None of the choices are correct.

Question

Quizplus · Accepted Answer

The majority interest taxable year should be determined first as it is the default method and applies unless a principal partner can satisfy the principal partners test. If the partnership has principal partners, then the principal partners test should be applied. Finally, the least aggregate deferral should be applied to determine the year-end if neither the majority interest taxable year nor the principal partners test can be satisfied.

In What Order Should the Tests to Determine a Partnership's