How does U.S. Treasury Regulation 1.482-1(e)(2) define the interquartile range? How do the Regulations definition differ from
Question:
How does U.S. Treasury Regulation §1.482-1(e)(2) define the interquartile range? How do the Regulations’ definition differ from the way MS Excel calculate the interquartile range (this may require you to compare the two methods). Explain the purpose of the interquartile range and how it is used. Is a taxpayer required to use the interquartile range to demonstrate it has achieved an arm’s length result? Calculate the interquartile range and the median for the following range of potential arm’s length operating margins:
Operating Margin (%)
Comp 2017 2018 2019
1 0.62 (0.99) 17.82
2 5.07 7.11 7.18
3 2.98 (3.87) 4.24
4 0.78 (0.17) 2.32
5 2.87 (11.79) 21.13
6 3.94 4.55 5.25
7 13.73 13.40 10.42
8 12.11 3.09 7.24
9 5.29 3.31 7.37
10 8.72 9.36 13.11
11 4.92 0.16 6.87
