Which of the following fiduciary entities are required to use the calendar year as their taxable period for income tax purposes?

a. estates
b. trusts (except those that are exempt)
c. both estates and trusts (except those that are exempt)
d. neither estates nor trusts (except those that are exempt)

B) Trusts (except those that are exempt)

Explanation:

The only three entities that are allowed to select a fiscal year are: estates, C corporations and tax exempt entities.

Trusts, along with partnerships, S corporations and personal service corporations mus use the calendar year as their taxable period  or the tax year of their owners. Some trusts can change to a different calendar year if they can establish a business purpose for doing so.

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.

answer; i believe that the correct answer is (d); the business benefits because owners can share responsibilities;