Question 1

Identify which of the following statements is true.

Accepted Answer

A) To be part of an affiliated group,a corporation must be at least 80% directly owned by another group member. 
B) Only common stock is considered when determining if the 80% ownership test is met for affiliated group eligibility. 
C) An affiliated group electing to file a consolidated return may be composed of as few as two corporations. 
D) All of the above are false. 
A) To be part of an affiliated group,a corporation must be at least 80% directly owned by another group member. 
B) Only common stock is considered when determining if the 80% ownership test is met for affiliated group eligibility. 
C) An affiliated group electing to file a consolidated return may be composed of as few as two corporations. 
D) All of the above are false.

Question 2

Identify which of the following statements is true.

Accepted Answer

A) The basic accounting method elections that are used by the seller in intercompany transactions do not override the intercompany transaction rules. 
B) P and S are members of an affiliated group that has filed consolidated tax returns for a number of years.The sale of inventory by P,which was acquired from S in an intercompany transaction,outside the affiliated group triggers the restoration of gain by S. 
C) Last year,P,S,and T Corporations have filed consolidated tax returns for a number of years.Last year P Corporation sold land (a Sec.1231 asset)to T at a $75,000 profit.The gain was deferred by P in last year's consolidated tax return.P sold the T stock to Mike on June 1 of this year.The stock sale will require P to report in its income the gain that was deferred on the land sale. 
D) All of the above are true. 
A) The basic accounting method elections that are used by the seller in intercompany transactions do not override the intercompany transaction rules. 
B) P and S are members of an affiliated group that has filed consolidated tax returns for a number of years.The sale of inventory by P,which was acquired from S in an intercompany transaction,outside the affiliated group triggers the restoration of gain by S. 
C) Last year,P,S,and T Corporations have filed consolidated tax returns for a number of years.Last year P Corporation sold land (a Sec.1231 asset)to T at a $75,000 profit.The gain was deferred by P in last year's consolidated tax return.P sold the T stock to Mike on June 1 of this year.The stock sale will require P to report in its income the gain that was deferred on the land sale. 
D) All of the above are true.

Question 3

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 4

Identify which of the following statements is true.

Accepted Answer

A) When applying the large corporation rules for purposes of determining underpayments,each member of an affiliated group is considered separately. 
B) The entire consolidated tax liability cannot be collected from one group member. 
C) Once consolidated tax returns have been filed for two consecutive years,the affiliated group must pay estimated taxes on a consolidated basis. 
D) All of the above are false. 
A) When applying the large corporation rules for purposes of determining underpayments,each member of an affiliated group is considered separately. 
B) The entire consolidated tax liability cannot be collected from one group member. 
C) Once consolidated tax returns have been filed for two consecutive years,the affiliated group must pay estimated taxes on a consolidated basis. 
D) All of the above are false.

Question 5

Toby Corporation owns 85% of James Corporation's single class of stock and 35% of Mony Corporation's single class of stock.James Corporation owns 45% of Mony's stock.The remainder of James and Mony's stock is owned by 80 individual shareholders.Are the corporations part of an affiliated group,and can they elect to file a consolidated tax return?

Accepted Answer

Since Toby owns more than 80% of the sto

Question 6

Parent and Subsidiary Corporations form an affiliated group.Last year,the initial year of operation,Parent and Subsidiary filed separate returns.This year.the group files a consolidated return.
Taxable Income
 
How much of the Subsidiary loss can be carried back to last year?

Accepted Answer

A) $0 
B) $1,000 
C) $10,000 
D) none of the above 
A) $0 
B) $1,000 
C) $10,000 
D) none of the above

Question 7

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 8

P and S are members of an affiliated group that has filed consolidated tax returns for a number of years.The sale of inventory by P that was acquired from S in an intercompany transaction outside the affiliated group triggers the recognition of gain by S.

Accepted Answer

A) True 
 B)False

Question 9

What are the five steps in calculating consolidated taxable income?

Accepted Answer

Generally,

Question 10

How do intercompany transactions affect the calculation of capital gains/losses?

Accepted Answer

Deferred intercompany gains/lo

Question 11

Jackson and Tanker Corporations are members of an affiliated group.The two corporations have been affiliated since they were formed last year.Both corporations have always used a calendar year as their tax year.Tanker,the subsidiary,has a separate return year NOL of $14,000 from last year.Jackson Corporation has a separate return year NOL of $16,000 from last year.Commencing this year,the two corporations filed a consolidated tax return.The NOLs can be carried over

Accepted Answer

A) to a consolidated return year and both are SRLY (separate return limitation year)losses. 
B) to a consolidated return year and Tanker's loss is a SRLY loss. 
C) to a consolidated return year without limit. 
D) to a consolidated return year and Jackson's loss is a SRLY loss. 
A) to a consolidated return year and both are SRLY (separate return limitation year)losses. 
B) to a consolidated return year and Tanker's loss is a SRLY loss. 
C) to a consolidated return year without limit. 
D) to a consolidated return year and Jackson's loss is a SRLY loss.

Question 12

Identify which of the following statements is false.

Accepted Answer

A) Inventory sales between group members are an example of an intercompany transaction. 
B) The basis to the purchasing member of property acquired in an intercompany transaction is the amount of cash paid to the selling member. 
C) The holding period for property acquired in an intercompany transaction begins when the corresponding item is reported. 
D) In general,buyers and sellers engaging in an intercompany transaction are treated as separate entities. 
A) Inventory sales between group members are an example of an intercompany transaction. 
B) The basis to the purchasing member of property acquired in an intercompany transaction is the amount of cash paid to the selling member. 
C) The holding period for property acquired in an intercompany transaction begins when the corresponding item is reported. 
D) In general,buyers and sellers engaging in an intercompany transaction are treated as separate entities.

Question 13

Jason and Jon Corporations are members of an affiliated group whose taxable incomes (before dividends)are $90,000 and $100,000,respectively.Jason Corporation owns all of the Jon stock.Jon Corporation received a dividend from a less-than-20%-owned corporation of $9,900 and $25,000 from a 100%-owned nonconsolidated insurance company.Jon Corporation distributed a $40,000 dividend to Jason Corporation.Jason Corporation also received dividends from a 25%-owned corporation of $9,500.The consolidated dividends-received deduction for federal income tax purposes is what?

Accepted Answer

[(0.70 × $9,900)+ (0.80 × $9,5

Question 14

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 15

Parent Corporation purchases a machine (a five-year property)for $20,000.It claims $4,000 of depreciation under the MACRS rules in the first year it owns the property.At the close of business on the last day of the first year,Parent sells the machine to a 100%-owned corporation (Subsidiary)for $18,000.Subsidiary immediately commences depreciating the machine as a five-year property using the regular MACRS rules.
What gain is reported by Parent Corporation in the first year that Subsidiary Corporation depreciates the machine?

Accepted Answer

The restored gain equals the depreciatio

Question 16

What is the carryback and carryforward rule for consolidated NOLs?

Accepted Answer

A consolidated NOL may be carr

Question 17

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

Question 18

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 19

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

Question 20

Alto and Bass Corporations have filed consolidated tax returns for several calendar years.At the close of business on September 30,Alto Corporation sells all of the Bass Corporation stock.What portion of Alto's and Bass's income for the current year will be included in the consolidated return,assuming its income is earned evenly throughout the year and all months have 30 days?

Accepted Answer

A)    
B)    
C)    
D) none of the above 
A)    
B)    
C)    
D) none of the above

Identify which of the following statements is true.

Identify which of the following statements is true.

Identify which of the following statements is true.

Identify which of the following statements is true.

Parent and Subsidiary Corporations form an affiliated group.Last year,the initial year of operation,Parent and Subsidiary filed separate returns.This year.the group files a consolidated return. Taxable Income How much of the Subsidiary loss can be carried back to last year?

Identify which of the following statements is true.

P and S are members of an affiliated group that has filed consolidated tax returns for a number of years.The sale of inventory by P that was acquired from S in an intercompany transaction outside the affiliated group triggers the recognition of gain by S.

What are the five steps in calculating consolidated taxable income?

How do intercompany transactions affect the calculation of capital gains/losses?

Identify which of the following statements is false.

Which of the following statements is true?

What is the carryback and carryforward rule for consolidated NOLs?

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,

Identify which of the following statements is true.

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

US Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Us Taxation of Foreign-Related Transactions

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Exam 8: Consolidated Tax Returns

Identify which of the following statements is true.

Identify which of the following statements is true.

Identify which of the following statements is true.

Identify which of the following statements is true.

Parent and Subsidiary Corporations form an affiliated group.Last year,the initial year of operation,Parent and Subsidiary filed separate returns.This year.the group files a consolidated return. Taxable Income How much of the Subsidiary loss can be carried back to last year?

Identify which of the following statements is true.

P and S are members of an affiliated group that has filed consolidated tax returns for a number of years.The sale of inventory by P that was acquired from S in an intercompany transaction outside the affiliated group triggers the recognition of gain by S.

What are the five steps in calculating consolidated taxable income?

How do intercompany transactions affect the calculation of capital gains/losses?

Identify which of the following statements is false.

Which of the following statements is true?

What is the carryback and carryforward rule for consolidated NOLs?

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,

Identify which of the following statements is true.

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

US Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Us Taxation of Foreign-Related Transactions

Filters