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Green Corporation is required to change its method of accounting for federal income tax purposes. The change will require an adjustment to income to be

Green Corporation is required to change its method of accounting for federal income tax purposes. The change will require an adjustment to income to be made over three tax periods. Joe, the sole shareholder of Green, wants to better understand the implications of this adjustment for E&P purposes. Joe gets dividend distributions from Green every year. Explain to Joe the impact of the adjustment on E&P.

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