Determine the tax year(s) each of the following S corporations must use. Explain.
1. Will, Dan, and Tom are equal owners of Rheen Corporation, and each has a different fiscal year. Will has a fiscal year that ends April 30, Dan's ends May 31, and Tom's ends November 30.
2. Assume the same facts as in part a, except that Tom and Dan each own a 20% interest in Rheen and Will owns the remaining 60%.
3. Assume the same facts as in part b. Rheen's business is seasonal; the heaviest revenue months are July and August. Revenues for 3 years are as follows:
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July and August
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12-Month Period
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Current year
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$90,000
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$300,000
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1st preceding year
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80,000
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260,000
|
|
2nd preceding year
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60,000
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230,000
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