The IRC restricts the choices for a partnership‘s tax year to prevent the deferral of tax. This causes most partnerships to adopt a calendar year for tax reporting. From the e-Activity, create a scenario using a fiscal tax year which allows a partnership to defer taxes that meet the requirements of Sections 706 and 444 of the IRC.
As discussed in the textbook, large accounting firms and other professional firms operate as limited liability partnerships (LLPs). Compare and contrast the advantages and disadvantages of a LLP form of business and a C-Corporation..Suggest the major reasons why a new entity would choose an LLP over a traditional partnership or a C-Corporation..