Rule: Per IRC Section 706(b), a partnership tax year must have the same taxable year as the common taxable year of the partners that, in the aggregate, have interest greater than 50%, which is determined based on the "testing day," the first day of the partnership's tax year (not considering the majority interest rule). Note: After a change is made to the "majority-interest" tax year end, the partnership does not have to change to another tax year for two years following the year of change. Exceptions to the rule exist. (1) If there is no "majority-interest" tax year, then the tax year is the tax year of all of the principal partners of the partnership (those owning 5% or more of the income or capital of the partnership). (2) If the partnership is still unable to determine a tax year using the general rule or the first exception, then the tax year that causes the least aggregate deferral of income to the partners must be adopted. Choice "C" is correct. In the absence of election to adopt an annual accounting period, the required tax year for a partnership is the tax year of one or more partners who, in aggregate, have more than 50% interest in profits and capital, per the majority interest rule. Choice "d" is incorrect. If there is no "majority-interest" tax year, then the tax year is the tax year of all of the principal partners of the partnership (those owning 5% or more of the income or capital of the partnership). If the partnership is still unable to determine a tax year using the general rule or the first exception, then the tax year that causes the least aggregate deferral of income to the partners must be adopted.Choice "a" is incorrect. A partnership may be able to avoid the rules above if it has a business purpose for selecting a different tax year and if this can be established with the IRS. In this case, a calendar year (assuming it is not already required because it coincides with the general rule or the exceptions identified above) may be used.Choice "b" is incorrect. If there is no "majority-interest" tax year, then the tax year is the tax year of all of the principal partners of the partnership (those owning 5% or more of the income or capital of the partnership).