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.

a. Complete the statement below that outlines the tax year the joint venture must adopt under the following ownership interests.

Note: Assume that the venture does not have a natural business year.

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

TheSelectmajority interest partners' ruleprincipal partners' ruleCorrect 1 of Item 1will apply in determining the partnership's tax year. Therefore, the partnership will use the same tax year asSelectRed CorporationBlue CorporationWhite CorporationCorrect 2 of Item 1.

b. The following data is provided regarding ownership interests.

	Tax Year Ending	Interest in Joint Venture
Red	October 31	30%
Blue	January 31	30%
White	September 30	40%

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.

Test for Fiscal Year Ending October 31
Partner	Year-End Date	Profit %	Months of Deferral	Product
Red	10/31	30
Blue	1/31	30
White	9/30	40
Aggregate deferral months

Test for Fiscal Year Ending January 31
Partner	Year-End Date	Profit %	Months of Deferral	Product
Red	10/31	30
Blue	1/31	30
White	9/30	40
Aggregate deferral months

Test for Fiscal Year Ending September 30
Partner	Year-End Date	Profit %	Months of Deferral	Product
Red	10/31	30
Blue	1/31	30
White	9/30	40
Aggregate deferral months

Therefore, the fiscal year-end date for the partnership is:SelectOctober 31January 31September 30