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Red, White, and Blue are unrelated corporations engaged in real estate developme

ID: 2451821 • Letter: R

Question

Red, White, and Blue are unrelated corporations engaged in real estate development. The three corporations formed a joint venture (treated as a partnership) to develop a tract of land.

The majority interest partners' rule will apply in determining the partnership's tax year. Therefore, the partnership will use the same tax year as Red Corporation.

A. The following data is provided regarding ownership interests.

Complete the tables below to determine the tax year the joint venture must adopt using the least aggregate deferral method.

Note: Carry the product answers out to one decimal place. Enter the product as a decimal (for example, 5.6). If an amount is zero, enter 0.

Tax Year Ending Interest in Joint Venture Red March 31 60% Blue June 30 20% White October 31 20%

Explanation / Answer

Red, White, and Blue are unrelated corporations engaged in real estate developme

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