Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Key and Glass Corporations were organized in 2018.They became an affiliated group and filed separate tax returns.In 2019,the corporations begin filing a consolidated tax return.Key and Glass report the following results: $$\begin{array} { | c | c | c | } 
\hline \text { Consolidated } & \begin{array} { c } 
\text { Income (loss) } \
\mathbf { 2 0 1 8 }
\end{array} & \begin{array} { c } 
\text { Income (loss) } \
\mathbf { 2 0 1 9 }
\end{array} \
\hline \text { Key } & ( \$ 30,000 ) & \$ 50,000 \
\text { Glass } & 10,000 & ( 35,000 ) \
\hline
\end{array}$$ Which of the following statements is not correct?

Accepted Answer

A) Key's last year NOL cannot offset Glass's last year profits. 
B) Key's last year NOL cannot offset this year's consolidated taxable income. 
C) Key's current year income must first be offset by Glass's current year loss. 
D) All of the above are correct. 
A) Key's last year NOL cannot offset Glass's last year profits. 
B) Key's last year NOL cannot offset this year's consolidated taxable income. 
C) Key's current year income must first be offset by Glass's current year loss. 
D) All of the above are correct.

Question 3

Identify which of the following statements is true.

Accepted Answer

A) A built-in deduction accrues in a separate return year,but is not recognized in a consolidated return year. 
B) Section 382 adopts a single-entity approach in determining ownership changes. 
C) The 50-percentage-point minimum stock ownership change that triggers the Sec.382 loss limitation rules will not occur in acquisitive transactions involving a group of corporations filing consolidated returns. 
D) All of the above are false. 
A) A built-in deduction accrues in a separate return year,but is not recognized in a consolidated return year. 
B) Section 382 adopts a single-entity approach in determining ownership changes. 
C) The 50-percentage-point minimum stock ownership change that triggers the Sec.382 loss limitation rules will not occur in acquisitive transactions involving a group of corporations filing consolidated returns. 
D) All of the above are false.

Question 4

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.

Question 5

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 6

Apple Corporation and Banana Corporation file consolidated returns.In January 2017,Apple sold Banana property with a basis of $120,000 for its fair value of $150,000.Banana sold the property to an unrelated party in April 2018 for $200,000.What amount of gain should be reported for these transactions in the consolidated returns for 2017 and 2018?

Accepted Answer

A)  $$\begin{array} { | l | l | } 
\hline 2017 & 2018 \
\hline \$ 30,000 & \$ 50,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | l | } 
\hline 2017 & 2018 \
\hline \$ 0 & \$ 50,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | l | } 
\hline 2017 & 2018 \
\hline \$ 30,000 & \$ 80,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | l | } 
\hline 2017 & 2018 \
\hline \$ 0 & \$ 80,000 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | l | } 
\hline 2017 & 2018 \
\hline \$ 30,000 & \$ 50,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | l | } 
\hline 2017 & 2018 \
\hline \$ 0 & \$ 50,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | l | } 
\hline 2017 & 2018 \
\hline \$ 30,000 & \$ 80,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | l | } 
\hline 2017 & 2018 \
\hline \$ 0 & \$ 80,000 \
\hline
\end{array}$$

Question 7

Parent Corporation sells land (a capital asset)to Subsidiary Corporation in an intercompany transaction,recognizing a $25,000 gain.Subsidiary holds the land as an investment for five years before selling the land to a nonmember of the group on an installment basis in a sale in which a $50,000 gain is realized.The sales proceeds are collectible in four equal installments with an appropriate interest amount being charged to the purchaser.Which statement is correct?

Accepted Answer

A) A $25,000 capital gain is included in consolidated taxable income when Parent sells the land to Subsidiary Corporation.A $50,000 capital gain is included in consolidated taxable income when Subsidiary sells the land. 
B) A $25,000 capital gain from Parent and a $50,000 capital gain from Subsidiary are included in consolidated taxable income when Subsidiary sells the land. 
C) The $25,000 capital gain from Parent and $50,000 capital gain from Subsidiary are included ratably in consolidated taxable income,commencing in the year the first installment is received. 
D) None of the above are correct. 
A) A $25,000 capital gain is included in consolidated taxable income when Parent sells the land to Subsidiary Corporation.A $50,000 capital gain is included in consolidated taxable income when Subsidiary sells the land. 
B) A $25,000 capital gain from Parent and a $50,000 capital gain from Subsidiary are included in consolidated taxable income when Subsidiary sells the land. 
C) The $25,000 capital gain from Parent and $50,000 capital gain from Subsidiary are included ratably in consolidated taxable income,commencing in the year the first installment is received. 
D) None of the above are correct.

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 false.

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

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

U.S. Taxation of Foreign-Related Transactions

an Introduction to Taxation

Determination of Tax

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Deductions and Losses

Business Expenses and Deferred Compensation

Itemized Deductions

Losses and Bad Debts

Depreciation,cost Recovery,amortization,and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Sec1231 and Recapture

Special Tax Computation Methods,tax Credits,and Payment of Tax

Tax Research

Corporations

Partnerships and S Corporations

Taxes and Investment Planning

Filters

Exam 8: Consolidated Tax Returns

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 false.

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

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

U.S. Taxation of Foreign-Related Transactions

an Introduction to Taxation

Determination of Tax

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Deductions and Losses

Business Expenses and Deferred Compensation

Itemized Deductions

Losses and Bad Debts

Depreciation,cost Recovery,amortization,and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Sec1231 and Recapture

Special Tax Computation Methods,tax Credits,and Payment of Tax

Tax Research

Corporations

Partnerships and S Corporations

Taxes and Investment Planning

Filters