Sally Is a Calendar-Year Taxpayer Who Owns a 30% Capital

Question 85
Multiple Choice

Sally is a calendar-year taxpayer who owns a 30% capital and profits interest in the SEM Partnership.Eric sells the remaining 70% capital and profits interest to Michelle on October 3.The partnership year-end is March 31 as permitted by the IRS for business purposes.Which of the following statements is correct? A) Sally must conform her tax year with the partnership tax year. B) The new partnership is a continuation of the old partnership. C) Sally's tax return will include a partnership distributive share only for the period ending March 31. D) Sally's tax return will include partnership distributive shares for periods ending March 31 and October 3.