Question 1

Identify which of the following statements is true.

Accepted Answer

A)  If 100% of the stock of two corporations is owned by the same individual, the two corporations are eligible to file a consolidated return. 
B)  The check-the-box regulations permit partnership and LLCs to elect C corporation tax treatment. 
C)  A group of corporations that meets the parent-subsidiary controlled group requirements is always eligible to file a consolidated return. 
D)  All of the above are false. 
A)  If 100% of the stock of two corporations is owned by the same individual, the two corporations are eligible to file a consolidated return. 
B)  The check-the-box regulations permit partnership and LLCs to elect C corporation tax treatment. 
C)  A group of corporations that meets the parent-subsidiary controlled group requirements is always eligible to file a consolidated return. 
D)  All of the above are false.

Question 2

What is the consequence of having losses subject to the SRLY limitations?

Accepted Answer

The effect of having a loss ta

Question 3

Explain the requirements a group of corporations must meet in order to elect to file a consolidated return.

Accepted Answer

The parent corporation must own at least

Question 4

Intercompany sales between members of an affiliated group filing separate returns cause deferred tax assets to be recognized by both buyer and seller.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is true?

Accepted Answer

A)  A consolidated group determines its general business credit on a consolidated basis. 
B)  The general business credit can be carried back 3 years and forward 15 years. 
C)  The general business credit can be carried forward indefinitely. 
D)  The general business credit cannot be carried forward or backward. 
A)  A consolidated group determines its general business credit on a consolidated basis. 
B)  The general business credit can be carried back 3 years and forward 15 years. 
C)  The general business credit can be carried forward indefinitely. 
D)  The general business credit cannot be carried forward or backward.

Question 6

Which of the following corporations is an includible corporation for purposes of filing a consolidated tax return?

Accepted Answer

A)  insurance companies 
B)  S corporations 
C)  car manufacturing corporation 
D)  foreign corporations 
A)  insurance companies 
B)  S corporations 
C)  car manufacturing corporation 
D)  foreign corporations

Question 7

Roland, Shedrick, and Tyrone Corporations formed an affiliated group a number of years ago, which has since filed consolidated tax returns. No prior Sec. 1231 losses have been reported by any group member. The group had a consolidated capital loss carryover last year. For the current year, the group reports the following results:   Which of following statements is incorrect?

Accepted Answer

A)  No Sec. 1231 recapture can occur this year. 
B)  The net capital gain is taxed at the regular corporate tax rates. 
C)  The Sec. 1231 loss is treated as an ordinary loss. 
D)  The net capital gain is $20,000. 
A)  No Sec. 1231 recapture can occur this year. 
B)  The net capital gain is taxed at the regular corporate tax rates. 
C)  The Sec. 1231 loss is treated as an ordinary loss. 
D)  The net capital gain is $20,000.

Question 8

The treatment of capital loss carrybacks and carryovers is similar to NOLs.

Accepted Answer

A) True 
 B)False

Question 9

Blair and Cannon Corporations are members of an affiliated group. No prior net Sec. 1231 losses have been reported by any group member. The two corporations report consolidated ordinary income of $100,000 and gains and losses from property transactions as follows.   Which of the following statements is correct?

Accepted Answer

A)  The consolidated group reports a net short-term capital gain of $1,000. 
B)  Blair Corporation's separate return reports a $4,000 net long-term capital gain. 
C)  Cannon Corporation's separate return reports a $1,000 net long-term capital loss. 
D)  All three of the above are correct. 
A)  The consolidated group reports a net short-term capital gain of $1,000. 
B)  Blair Corporation's separate return reports a $4,000 net long-term capital gain. 
C)  Cannon Corporation's separate return reports a $1,000 net long-term capital loss. 
D)  All three of the above are correct.

Question 10

Identify which of the following statements is true.

Accepted Answer

A)  Rules for carryforward and carryback of a consolidated net capital loss and a consolidated NOL are the same with the exception of the carryforward period. 
B)  Capital loss carrybacks and carryforwards are all treated as short-term capital losses. 
C)  A member leaving an affiliated group cannot use capital loss carryovers that originated in one of its previous separate return years. 
D)  All of the above are false. 
A)  Rules for carryforward and carryback of a consolidated net capital loss and a consolidated NOL are the same with the exception of the carryforward period. 
B)  Capital loss carrybacks and carryforwards are all treated as short-term capital losses. 
C)  A member leaving an affiliated group cannot use capital loss carryovers that originated in one of its previous separate return years. 
D)  All of the above are false.

Question 11

Marietta and Alpharetta Corporation, two accrual method of accounting corporations that use the calendar year as their tax year, have filed consolidated tax returns for a number of years. Alpharetta Corporation, a 100% owned subsidiary of Marietta, is transferring a patent, equipment, and working capital to newly created Georgia Corporation in exchange for 100% of its stock. In 2018, the corporation will begin to produce parts for the computer industry. Georgia Corporation expects to incur organizational expenditures of $10,000 and start-up expenditures of $60,000. What tax issues should Georgia Corporation consider with respect to the selection of its overall accounting method, inventory method, and tax year, and the proper reporting of its organizational and start-up expenditures?

Accepted Answer

• What tax year can Georgia Corporation

Question 12

Parent and Subsidiary Corporations are members of an affiliated group. Their separate taxable incomes (before taking into account any dividends) are $75,000 and $85,000, respectively. Subsidiary Corporation receives a dividend from a less-than-20%-owned corporation of $8,000 and from an affiliated 100%-owned nonconsolidated insurance subsidiary of $40,000. Subsidiary distributes a dividend of $35,000 to Parent Corporation who also receives dividends of $6,000 from a less-than-20%-owned corporation. The consolidated dividends-received deduction is what?

Accepted Answer

The answer of Parent and Subsidiary Corporations are members of...

Question 13

Parent and Subsidiary Corporations form an affiliated group. In 2018, the initial year of operation, Parent and Subsidiary filed separate returns. In 2019, the group files a consolidated tax return. The results for 2018 and 2019 are: Taxable Income
  How much of Subsidiary's loss can be carried back to last year?

Accepted Answer

A)  $0 
B)  $20,000 
C)  $25,000 
D)  none of the above 
A)  $0 
B)  $20,000 
C)  $25,000 
D)  none of the above

Question 14

A consolidated 2018 NOL carryover is $36,000 at the beginning of 2019 is exists. Of the 2018 NOL, 25% of the loss is allocable to Duke Corporation. Duke Corporation leaves the group in the middle of the affiliated group's tax year. Before Duke's departure, it had earnings of $15,000 for the year, and the remainder of the affiliated group earned a total of $25,000, or $40,000 of taxable income for the group, excluding any NOL carryover. Following its departure from the affiliated group, Duke earned $8,000 in its first separate return. How much of the $36,000 NOL can Duke use on its first separate return?

Accepted Answer

$ 15,000 Duke contribution to current ye

Question 15

Identify which of the following statements is true.

Accepted Answer

A)  A corporation may be required to file a separate return and file with an affiliated group in the same calendar year. 
B)  When a corporation joins in filing a consolidated return, taxable income of the member is combined with other members' taxable income prior to any adjustments. 
C)  If a corporation becomes a member of an affiliated group within the first thirty days of the corporation's tax year, the corporation can elect not to file a short-period tax return. 
D)  All of the above are false. 
A)  A corporation may be required to file a separate return and file with an affiliated group in the same calendar year. 
B)  When a corporation joins in filing a consolidated return, taxable income of the member is combined with other members' taxable income prior to any adjustments. 
C)  If a corporation becomes a member of an affiliated group within the first thirty days of the corporation's tax year, the corporation can elect not to file a short-period tax return. 
D)  All of the above are false.

Question 16

Identify which of the following statements is true.

Accepted Answer

A)  A shareholder corporation that receives a nondividend distribution from an affiliated group member is not required to recognize a gain when the distribution amount exceeds the shareholder's basis in the distributing corporation's stock. 
B)  The dividends-received deduction limitation for dividends received by members of an affiliated group from nonmembers is applied to the separate taxable income of each group member. 
C)  The dividends-received deduction cannot be taken in full on a consolidated return if the deduction amount creates or increases a consolidated NOL. 
D)  All of the above are false. 
A)  A shareholder corporation that receives a nondividend distribution from an affiliated group member is not required to recognize a gain when the distribution amount exceeds the shareholder's basis in the distributing corporation's stock. 
B)  The dividends-received deduction limitation for dividends received by members of an affiliated group from nonmembers is applied to the separate taxable income of each group member. 
C)  The dividends-received deduction cannot be taken in full on a consolidated return if the deduction amount creates or increases a consolidated NOL. 
D)  All of the above are false.

Question 17

On January 1, 2018, Alpha Corporation purchases 100% of the stock of Omega Corporation for $2 million. During the year, Omega Corporation earns $300,000 of taxable income, $30,000 of tax-exempt income, and distributes $150,000 in dividends. Each company paid its own tax liability. What basis adjustment must Alpha Corporation make at year-end?

Accepted Answer

Alpha Corporation's initial basis for th

Question 18

All of the stock of Hartz and Ryder Corporations is owned by Morgen. Hartz Corporation has been reporting $150,000 of taxable income for each of the past five years. Ryder Corporation has been reporting $30,000 in NOLs for the same period, which totals $150,000. Approximately one-third of Hartz's profits come from sales to Ryder. Intercompany sales between Hartz and Ryder have increased during each of the last five years. What tax issues should Morgen consider with respect to his investments in Hartz and Ryder Corporations?

Accepted Answer

• What advantages would accrue if the Ha

Question 19

Why are other intercompany transactions not given any special treatment?

Accepted Answer

Since both sides of the transaction are

Question 20

Identify which of the following statements is false.

Accepted Answer

A)  A corresponding item includes the income, gain, deduction, or loss amount reported by the buyer from an intercompany transaction, or from property acquired in an intercompany transaction. 
B)  Affiliated groups of corporations filing a consolidated tax return are not eligible for the small corporation exemption from the corporate alternative minimum tax. 
C)  An intercompany transaction generally results in the selling member and buying member in a property transaction being treated as divisions of a single corporation. 
D)  Intercompany dividends and undistributed subsidiary earnings do not create temporary differences for affiliated companies filing a consolidated return. 
A)  A corresponding item includes the income, gain, deduction, or loss amount reported by the buyer from an intercompany transaction, or from property acquired in an intercompany transaction. 
B)  Affiliated groups of corporations filing a consolidated tax return are not eligible for the small corporation exemption from the corporate alternative minimum tax. 
C)  An intercompany transaction generally results in the selling member and buying member in a property transaction being treated as divisions of a single corporation. 
D)  Intercompany dividends and undistributed subsidiary earnings do not create temporary differences for affiliated companies filing a consolidated return.

Identify which of the following statements is true.

What is the consequence of having losses subject to the SRLY limitations?

Explain the requirements a group of corporations must meet in order to elect to file a consolidated return.

Intercompany sales between members of an affiliated group filing separate returns cause deferred tax assets to be recognized by both buyer and seller.

Which of the following statements is true?

Which of the following corporations is an includible corporation for purposes of filing a consolidated tax return?

The treatment of capital loss carrybacks and carryovers is similar to NOLs.

Identify which of the following statements is true.

Identify which of the following statements is true.

Identify which of the following statements is true.

Why are other intercompany transactions not given any special treatment?

Identify which of the following statements is false.

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Us Taxation of Foreign-Related Transactions

Filters

Exam 8: Consolidated Tax Returns

Identify which of the following statements is true.

What is the consequence of having losses subject to the SRLY limitations?

Explain the requirements a group of corporations must meet in order to elect to file a consolidated return.

Intercompany sales between members of an affiliated group filing separate returns cause deferred tax assets to be recognized by both buyer and seller.

Which of the following statements is true?

Which of the following corporations is an includible corporation for purposes of filing a consolidated tax return?

The treatment of capital loss carrybacks and carryovers is similar to NOLs.

Identify which of the following statements is true.

Identify which of the following statements is true.

Identify which of the following statements is true.

Why are other intercompany transactions not given any special treatment?

Identify which of the following statements is false.

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Us Taxation of Foreign-Related Transactions

Filters