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Week Two DQ 1
Post a 200-300-word response to the following discussion question by clicking on Reply.
What are the alternative tax years available to a corporation? What factors should be considered in
electing the tax year?
A corporation can choose between a calendar or fiscal year for its tax year. No matter the choice each
equals a 12-month period. A calendar year begins January first and ends on December 31st. A fiscal year
ends on the last day or any other month besides December. The regulation for running a calendar year
or a fiscal year is it must end on the last day of the month, not any other day.
Corporations make the decision of a fiscal year or calendar year based on whether there is a parent
company involved and the type of business. If it is an S corporation it must use the calendar year of
January to December according to the Internal Revenue Service. Other companies that have set tax year
requirements according the Internal Revue service regulations is a subsidiary or a personal service
corporation. If it is a subsidiary it must change it tax year to meet the parent company’s tax year. This is
because of consolidation of financial statement required by the IRS would be difficult to determine. The
personal service corporation is required to use the calendar year to prevent transferring income to
shareholders at the end of a tax year.
The last area is what every a company decides will be its annual accounting period must be the tax year.
If a corporation after making a tax year determines the current calendar year or fiscal year does not
work, it must request a change from the IRS.

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 Week Two DQ 1 Post a 200-300-word response to the following discussion question by clicking on Reply. What are the alternative tax years available to a corporation? What factors should be considered in electing the tax year? A corporation can choose between a calendar or fiscal year for it ...
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