Question 1

Identify which of the following statements is true.

Accepted Answer

A)  When a new corporation joins an affiliated group, all of its income and expense items for the tax year, including the acquisition date, must be allocated between the separate tax return and consolidated tax return that are to be filed based on the number of days included in each of the two tax years. 
B)  All members of a consolidated group must use the same tax year. 
C)  A consolidated return election may be revoked after 5 years. 
D)  All of the above are false. 
A)  When a new corporation joins an affiliated group, all of its income and expense items for the tax year, including the acquisition date, must be allocated between the separate tax return and consolidated tax return that are to be filed based on the number of days included in each of the two tax years. 
B)  All members of a consolidated group must use the same tax year. 
C)  A consolidated return election may be revoked after 5 years. 
D)  All of the above are false.

Question 2

Identify which of the following statements is true.

Accepted Answer

A)  Permission to discontinue the filing of consolidated tax returns is sometimes granted by the IRS. 
B)  Corporations that join in a consolidated return must adopt the same tax year as the parent corporation. 
C)  Additional administrative costs may be incurred when filing a consolidated tax return. 
D)  All of the above are true. 
A)  Permission to discontinue the filing of consolidated tax returns is sometimes granted by the IRS. 
B)  Corporations that join in a consolidated return must adopt the same tax year as the parent corporation. 
C)  Additional administrative costs may be incurred when filing a consolidated tax return. 
D)  All of the above are true.

Question 3

Mako and Snufco Corporations are affiliated and have filed consolidated returns for the first time in 2019. Mako acquired 100% of Zebco stock on January 1 of 2019, the date of Zebco's formation. Mako, Snufco, and Zebco, report the following taxable incomes for 2018 and 2019.   How much of the 2018 Zebco NOL be used to offset CTI in 2019?

Accepted Answer

A)  $0 
B)  $12,000 
C)  $15,000 
D)  $20,000 
A)  $0 
B)  $12,000 
C)  $15,000 
D)  $20,000

Question 4

Cardinal and Bluebird Corporations both use a calendar year as their tax year. At the close of business on June 30, Cardinal Corporation buys all of Bluebird Corporation's stock. If the two corporations file a consolidated return and both corporations earn their income evenly throughout the year, what portion of Bluebird's income will be included in the consolidated return? (Assume all months have 30 days.)

Accepted Answer

A)  50% 
B)  100% 
C)  0% 
D)  none of the above 
A)  50% 
B)  100% 
C)  0% 
D)  none of the above

Question 5

What types of corporations are not includible corporations for purposes of determining whether or not an affiliated group exists?

Accepted Answer

Special tax status corporations are not

Question 6

Cardinal and Bluebird Corporations both use a calendar year as their tax year. At the close of business on June 30, Cardinal Corporation buys all of Bluebird Corporation's stock. If the two corporations file a consolidated return and both corporations earn their income evenly throughout the year, what portion of Cardinal's income will be included in the consolidated return? (Assume all months have 30 days.)

Accepted Answer

A)  100% 
B)  0% 
C)  50% 
D)  none of the above 
A)  100% 
B)  0% 
C)  50% 
D)  none of the above

Question 7

Parent and Subsidiary Corporations have filed calendar- year consolidated tax returns for several years. Parent Corporation uses the cash method of accounting while Subsidiary Corporation uses the accrual method of accounting. If Parent lends Subsidiary money,

Accepted Answer

A)  the interest expense is deductible when accrued. 
B)  the interest income is reported when the interest expense is accrued by Subsidiary. 
C)  the interest expense and interest income may be reported in different consolidated return years. 
D)  the interest expense deduction is taken when Parent reports the interest income. 
A)  the interest expense is deductible when accrued. 
B)  the interest income is reported when the interest expense is accrued by Subsidiary. 
C)  the interest expense and interest income may be reported in different consolidated return years. 
D)  the interest expense deduction is taken when Parent reports the interest income.

Identify which of the following statements is true.

Identify which of the following statements is true.

What types of corporations are not includible corporations for purposes of determining whether or not an affiliated group exists?

Parent and Subsidiary Corporations have filed calendar- year consolidated tax returns for several years. Parent Corporation uses the cash method of accounting while Subsidiary Corporation uses the accrual method of accounting. If Parent lends Subsidiary money,

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

Tax Deductions and Travel Expenses for Employees and Self-Employed Individuals

Filters

Exam 8: Consolidated Tax Returns

Identify which of the following statements is true.

Identify which of the following statements is true.

What types of corporations are not includible corporations for purposes of determining whether or not an affiliated group exists?

Parent and Subsidiary Corporations have filed calendar- year consolidated tax returns for several years. Parent Corporation uses the cash method of accounting while Subsidiary Corporation uses the accrual method of accounting. If Parent lends Subsidiary money,

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

Tax Deductions and Travel Expenses for Employees and Self-Employed Individuals

Filters