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Question: On June 22, 1995, RM and Suga bought two (2) parcels of land from Jin. On May 28, 1996, they bought another 3 parcels of land from Jung Kook. The first 2 parcels of land were sold by RM and Suga to Jisoo in 1998 while the three parcels of land were sold to Baby Spice on March 19, 2000. RM and Suga realized a net profit in the sale made in 1998 in the amount of Php 2.5M, while they realized a net profit of Php700,000.00 in the sale made in 2000. The corresponding Capital Gains Taxes were paid for the two sales. However, in a letter by the BIR Commissioner, he contends that RM and Suga are liable for Partnership income tax because by distributing the profits of the sale among themselves they have formed an unregistered partnership. RM and Suga on the other hand claimed that they are not partners alleging that they are merely co-owners of the land and therefore there is no partnership. Did RM and Suga formed a partnership? Explain.
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