Doug is considering investing in one of two partnerships that will build, own, and operate a hotel.

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Doug is considering investing in one of two partnerships that will build, own, and operate a hotel. One is located in Canada and one is located in Arizona. Assuming both investments will generate the same before-tax rate of return, which entity should Doug invest in when considering the after-tax consequences of the investment? Assume Doug’s marginal rate is 37 percent, he will be a passive investor in the business, and he will report the flow-through income from either entity on his tax return. Explain (ignore any foreign tax credit issues).

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Related Book For  answer-question

Taxation Of Individuals And Business Entities 2021

ISBN: 9781260247138

12th Edition

Authors: Brian Spilker, Benjamin Ayers, John Barrick, Troy Lewis, John Robinson, Connie Weaver, Ronald Worsham

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