Exam 8: Consolidated Tax Returns

Gold and Bronze elect to form a Federal consolidated group.Gold,the parent entity,uses a calendar tax year,while Bronze's tax year ends on March 31.Which tax year(s)does the new consolidated group use?

A Federal consolidated tax return group can apply the "relative taxable income" method as a means to apportion the tax liabilities of the members among the affiliates.

Each of the members of a Federal consolidated tax return group can claim its own $40,000 AMT exemption,subject to phase-out.

A consolidated Federal income tax group must meet the eligibility requirements of the Regulations only on the first day of the first year for which the election to consolidate is effective.

Which of the following is eligible to join in a Federal consolidated return?

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.

Lacking elections to the contrary,Federal consolidated NOLs are carried back two years and then forward twenty years.

In computing consolidated taxable income,compensation amounts are removed from the taxable incomes of the group members and determined on a group basis.

Most of the rules governing the use of consolidated returns are found in tax ____________________,and not the ____________________.

ParentCo and SubCo have filed consolidated returns since both entities were incorporated in 2012.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 2014 consolidated loss:

For consolidated tax return purposes,purchased goodwill is amortized as a deduction to taxable income over 15 years.Under financial accounting rules,40-year amortization is allowed.

A calendar year parent corporation wants to file its tax returns on a consolidated basis with its affiliates.The group's election to file consolidated Federal corporate income tax returns must be made by the extended due date of the first return on which the consolidation is applied .

Generally,when a subsidiary leaves an on-going consolidated group,it must wait ____________________ years before it can reenter another consolidated group. or

The ____________________ rules can limit the net operating loss deduction claimed on a Federal consolidated return. or or or

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

The foreign tax credit of a consolidated group can be greater than the sum of the credits of the group members when filing separately.

Members of a controlled group share all but which of the following tax attributes?

A joint venture,taxed like a partnership,can join in a consolidated Federal income tax return.

Within a Federal consolidated income tax group,SubOne ____________________ (can/cannot)use the cash method at the same time that SubTwo uses the accrual method.

Which of the following tax effects becomes more restrictive if an election is made to file a group's Federal corporate income tax returns on a consolidated basis?