Question 1

List the filing requirements that must be met by a Federal consolidated group.

Accepted Answer

The major filing req

Question 2

Outline the major advantages and disadvantages of filing Federal corporate income tax returns on a consolidated basis. Limit your comments to the income tax effects of the election.

Accepted Answer

Assessing only the Federal income tax as

Question 3

Parent Corporation's current-year taxable income included $100,000 net income from operations and a $40,000 net long-term capital gain.Parent also made a $19,000 contribution to State University.SubCo produced $75,000 income from operations and incurred a $50,000 net short-term capital loss.
Use the computational worksheet of Figure 8-2 to derive the group members' separate taxable incomes and the group's consolidated taxable income.

Accepted Answer

ParentCo's separate taxable income amoun

Question 4

ParentCo and SubCo had the following items of income and deduction for the current year.
 
Compute ParentCo and SubCo's consolidated taxable income or loss.

Accepted Answer

A) $81,000. 
B) $88,000. 
C) $90,000. 
D) $90,500. 
E) Some other amount. 
A) $81,000. 
B) $88,000. 
C) $90,000. 
D) $90,500. 
E) Some other amount.

Question 5

How many consolidated tax returns are filed annually? What types of taxpayer do they represent?

Accepted Answer

Of the over 5.5 million corporations org

Question 6

ParentCo owned 100% of SubCo for the entire year.ParentCo uses the accrual method of tax accounting,whereas SubCo uses the cash method.During the year,SubCo sold raw materials to ParentCo for $35,000 under a contract that requires no payment to SubCo until the following year.
Exclusive of this transaction,ParentCo had income for the year of $80,000,and SubCo had income of $50,000.The group's consolidated taxable income for the year was:

Accepted Answer

A) $165,000. 
B) $130,000. 
C) $95,000. 
D) Some other amount. 
A) $165,000. 
B) $130,000. 
C) $95,000. 
D) Some other amount.

Question 7

All affiliates joining in a newly formed consolidated return must consent to the election on Form 1122,as attached to the tax return for the group.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following tax items is not likely to be considered when a group of related corporations is evaluating the election to file on a consolidated basis?

Accepted Answer

A) Foreign tax payments. 
B) Capital gains and losses. 
C) Deferral of gains from intercompany transactions. 
D) AMT preferences and adjustments. 
E) All of the above should be considered. 
A) Foreign tax payments. 
B) Capital gains and losses. 
C) Deferral of gains from intercompany transactions. 
D) AMT preferences and adjustments. 
E) All of the above should be considered.

Question 9

ParentCo and SubOne have filed consolidated returns since 2006.SubTwo was formed in 2009 through an asset spin-off from ParentCo.SubTwo has joined in the filing of consolidated returns since then.Taxable income computations for the members include the following.None of the group members incurred any capital gain or loss transactions during these years,nor did they make any charitable contributions.
 
If ParentCo does not elect to forgo the carryback of the 2009 net operating loss,what portion of the 2009 consolidated net operating loss is carried back to offset prior years' income?

Accepted Answer

A) $120,000. 
B) $90,000. 
C) $40,000. 
D) $30,000. 
E) $0. 
A) $120,000. 
B) $90,000. 
C) $40,000. 
D) $30,000. 
E) $0.

Question 10

ParentCo,SubOne and SubTwo have filed consolidated returns since 2008.All of the entities were incorporated in 2007.Taxable income computations for the members include the following.None of the group members incurred any capital gain or loss transactions during these years,nor did they make any charitable contributions.
 
How should the 2009 consolidated net operating loss be apportioned among the group members?

Accepted Answer

The answer of ParentCo,SubOne and SubTwo have filed consolidated returns...

Question 11

Most of the rules governing the use of consolidated returns are found in _________________________ regulations adopted since 1969.

Accepted Answer

The answer of Most of the rules governing the use...

Question 12

The starting point in computing consolidated taxable income is the separate Federal taxable income amounts of the affiliated group members.

Accepted Answer

A) True 
 B)False

Question 13

Conformity among the members of a consolidated group must be implemented for which of the following tax items?

Accepted Answer

A) Use of foreign tax payments (i.e., as a credit or deduction). 
B) Tax accounting method (i.e., cash or accrual). 
C) Inventory accounting method (e.g., FIFO or LIFO). 
D) Tax year end. 
E) None of the above is subject to conformity among the affiliates. 
A) Use of foreign tax payments (i.e., as a credit or deduction). 
B) Tax accounting method (i.e., cash or accrual). 
C) Inventory accounting method (e.g., FIFO or LIFO). 
D) Tax year end. 
E) None of the above is subject to conformity among the affiliates.

Question 14

The § 1231 gain of a consolidated group can be less than the sum of the gains from asset sales of the group members when filing separately.

Accepted Answer

A) True 
 B)False

Question 15

In terms of the consolidated return rules,non-U.S.corporations,tax-exempt entities,limited liability companies,partnerships,and trusts are ____________________ corporations.

Accepted Answer

The answer of In terms of the consolidated return rules,non-U.S.corporations,tax-exempt...

Question 16

ParentCo purchased all of SubCo's stock on January 1,2008,and the companies have filed consolidated returns since 2008.Taxable income computations for the members include the following.Neither group member incurred any capital gain or loss transactions during these years,nor did they make any charitable contributions.
The 2009 net operating loss:

Accepted Answer

A) may be carried back to offset SubCo's 2007 taxable income. 
B) may be carried forward only and applied against group income if so elected by ParentCo. 
C) cannot be carried back against 2007 SubCo income, as consolidated returns were not filed. 
D) either a or b, but not both. 
A) may be carried back to offset SubCo's 2007 taxable income. 
B) may be carried forward only and applied against group income if so elected by ParentCo. 
C) cannot be carried back against 2007 SubCo income, as consolidated returns were not filed. 
D) either a or b, but not both.

Question 17

Over time,the consolidated return rules have shifted from penalizing joint filing to an encouragement for conglomerates to elect to file on a consolidated basis.

Accepted Answer

A) True 
 B)False

Question 18

The domestic production activities deduction (DPAD)of a consolidated group can be greater than the sum of the deductions of the group members when filing separately.

Accepted Answer

A) True 
 B)False

Question 19

In computing consolidated taxable income,a distribution from Subsidiary to Parent is an example of a(n)_________________________ item.

Accepted Answer

The answer of In computing consolidated taxable income,a distribution from...

Question 20

Which of the following is not generally a disadvantage of filing tax returns on a consolidated basis?

Accepted Answer

A) Compliance costs usually are higher. 
B) Realized losses from transactions between affiliates cannot be recognized immediately. 
C) Operating losses of an affiliate reduce the tax basis of the parent's ownership interest in the entity. This increases the gain on the disposal of the affiliate. 
D) Gains from one affiliate can be offset by losses from another. This reduces the tax liabilities of the group as a whole. 
E) All of the above are disadvantages. 
A) Compliance costs usually are higher. 
B) Realized losses from transactions between affiliates cannot be recognized immediately. 
C) Operating losses of an affiliate reduce the tax basis of the parent's ownership interest in the entity. This increases the gain on the disposal of the affiliate. 
D) Gains from one affiliate can be offset by losses from another. This reduces the tax liabilities of the group as a whole. 
E) All of the above are disadvantages.

List the filing requirements that must be met by a Federal consolidated group.

Outline the major advantages and disadvantages of filing Federal corporate income tax returns on a consolidated basis. Limit your comments to the income tax effects of the election.

ParentCo and SubCo had the following items of income and deduction for the current year. Compute ParentCo and SubCo's consolidated taxable income or loss.

How many consolidated tax returns are filed annually? What types of taxpayer do they represent?

All affiliates joining in a newly formed consolidated return must consent to the election on Form 1122,as attached to the tax return for the group.

Which of the following tax items is not likely to be considered when a group of related corporations is evaluating the election to file on a consolidated basis?

Most of the rules governing the use of consolidated returns are found in _________________________ regulations adopted since 1969.

The starting point in computing consolidated taxable income is the separate Federal taxable income amounts of the affiliated group members.

Conformity among the members of a consolidated group must be implemented for which of the following tax items?

The § 1231 gain of a consolidated group can be less than the sum of the gains from asset sales of the group members when filing separately.

In terms of the consolidated return rules,non-U.S.corporations,tax-exempt entities,limited liability companies,partnerships,and trusts are ____________________ corporations.

Over time,the consolidated return rules have shifted from penalizing joint filing to an encouragement for conglomerates to elect to file on a consolidated basis.

The domestic production activities deduction (DPAD)of a consolidated group can be greater than the sum of the deductions of the group members when filing separately.

In computing consolidated taxable income,a distribution from Subsidiary to Parent is an example of a(n)_________________________ item.

Which of the following is not generally a disadvantage of filing tax returns on a consolidated basis?

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings and Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Taxation of International Transactions

Partnerships: Formation, operation, and Basis

Partnerships: Distributions, transfer of Interests, and Terminations

S Corporations

Comparative Forms of Doing Business

Exempt Entities

Multistate Corporate Taxation

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Exam 8: Consolidated Tax Returns

List the filing requirements that must be met by a Federal consolidated group.

Outline the major advantages and disadvantages of filing Federal corporate income tax returns on a consolidated basis. Limit your comments to the income tax effects of the election.

ParentCo and SubCo had the following items of income and deduction for the current year. Compute ParentCo and SubCo's consolidated taxable income or loss.

How many consolidated tax returns are filed annually? What types of taxpayer do they represent?

All affiliates joining in a newly formed consolidated return must consent to the election on Form 1122,as attached to the tax return for the group.

Which of the following tax items is not likely to be considered when a group of related corporations is evaluating the election to file on a consolidated basis?

Most of the rules governing the use of consolidated returns are found in _________________________ regulations adopted since 1969.

The starting point in computing consolidated taxable income is the separate Federal taxable income amounts of the affiliated group members.

Conformity among the members of a consolidated group must be implemented for which of the following tax items?

The § 1231 gain of a consolidated group can be less than the sum of the gains from asset sales of the group members when filing separately.

In terms of the consolidated return rules,non-U.S.corporations,tax-exempt entities,limited liability companies,partnerships,and trusts are ____________________ corporations.

Over time,the consolidated return rules have shifted from penalizing joint filing to an encouragement for conglomerates to elect to file on a consolidated basis.

The domestic production activities deduction (DPAD)of a consolidated group can be greater than the sum of the deductions of the group members when filing separately.

In computing consolidated taxable income,a distribution from Subsidiary to Parent is an example of a(n)_________________________ item.

Which of the following is not generally a disadvantage of filing tax returns on a consolidated basis?

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings and Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Taxation of International Transactions

Partnerships: Formation, operation, and Basis

Partnerships: Distributions, transfer of Interests, and Terminations

S Corporations

Comparative Forms of Doing Business

Exempt Entities

Multistate Corporate Taxation

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters