Rose and Irene each have a 50% interest in a partnership that started business on July 1. Rose uses a calendar year, while Irene has a fiscal year ending November 30. Which of the following is true?
A. The partnership may also use the calendar year because at least 50% is owned by a calendar-year taxpayer.
B. The partnership must use the fiscal year ending November 30 because it results in a deferral of 11 months.
C. The partnership must use the fiscal year ending November 30 because it results in a deferral of 1 month.
D. The partnership may use either the calendar year or fiscal year ending November 30 because each partner owns an equal percentage.
Answer: C. The partnership must use the fiscal year ending November 30 because it results in a deferral of 1 month.
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