Question 1

If,on joining an affiliated group,SubCo has a different tax year than that of ParentCo,SubCo must switch its year-end to ParentCo's by the end of the ____________________ (first,second,etc. )tax year after the election to consolidate.
or

Accepted Answer

The answer of If,on joining an affiliated group,SubCo has a...

Question 2

An affiliated group aggregates its separate charitable contributions,deductions for which then are subject to an annual limitation of 10% of consolidated taxable income.

Accepted Answer

A) True 
 B)False

Question 3

The Philstrom consolidated group reported the following taxable income amounts.Parent owns all of the stock of both Junior and Minor.Determine the net operating loss (NOL)that is apportioned to Parent.

Accepted Answer

A) $360,000. 
B) $400,000. 
C) $500,000. 
D) $900,000.All NOLs of a consolidated group are apportioned to the parent.

Question 4

Which of the following potentially is a disadvantage of electing to file a Federal corporate income tax consolidated return?

Accepted Answer

A) Increased deduction amounts when computations are made on a group basis. 
B) Deferral of gains realized in transactions between group members. 
C) Increased basis in the stock of a subsidiary that generates annual taxable income. 
D) Additional administrative costs in complying with the election.

Question 5

Most of the Federal consolidated income tax return rules are found in detailed sections of the tax Regulations.

Accepted Answer

A) True 
 B)False

Question 6

The consolidated net operating loss of the Parent Group includes all of the following except:

Accepted Answer

A) Parent's operating income/loss. 
B) Parent's passive activity income/loss. 
C) Parent's charitable contributions. 
D) Subsidiary's operating income/loss.

Question 7

A Federal consolidated group reports a net operating loss for the year.How is this amount allocated to the various group members? Why is this allocation important?

Accepted Answer

The answer of A Federal consolidated group reports a net...

Question 8

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

Accepted Answer

A) Compliance costs usually are higher when a consolidation election is in effect. 
B) Realized losses from transactions between affiliates are not recognized immediately. 
C) Capital gains from one affiliate can be offset by the capital losses from another.This can reduce the tax liabilities of the group as a whole. 
D) The election generally is binding for future tax years.

Question 9

ParentCo purchased all of the stock of ChildCo on January 2,2012,and the two companies filed consolidated returns for 2012 and thereafter.Both entities were incorporated in 2011.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.No § 382 limit applies.  Assuming that no election is made to forgo the carryback,to what extent are ChildCo's 2011 losses used by the group in 2012-2014?

Accepted Answer

A) $100,000. 
B) $95,000. 
C) $75,000. 
D) $0.

Question 10

Where are the controlling Federal income tax rules regarding consolidated tax returns to be found? What is the general philosophy of those rules?

Accepted Answer

The answer of Where are the controlling Federal income tax...

Question 11

ParentCo's controlled group includes the following members.ParentCo owns all of the stock in each of the listed entities.Which entities can join ParentCo in a consolidated return?

Accepted Answer

The answer of ParentCo's controlled group includes the following members.ParentCo...

Question 12

The calendar year parent and affiliates must elect to file on a consolidated basis by ____________________ 15 after the first consolidated tax year.
or
or

Accepted Answer

The answer of The calendar year parent and affiliates must...

Question 13

The right to file on a consolidated basis is available to a group of corporations when they constitute a "parent-subsidiary affiliated group."

Accepted Answer

A) True 
 B)False

Question 14

Assume that all of the affiliates in a Federal consolidated group conduct allowable manufacturing activities.Is a domestic production activities deduction (DPAD)available? Who can claim it? How is each member's DPAD,if any,computed?

Accepted Answer

The answer of Assume that all of the affiliates in...

Question 15

The Harris consolidated group reports a net operating loss (NOL)for the year.The tax law works to:

Accepted Answer

A) Allow unused charitable contributions a 20-year carryforward. 
B) Disallow any carrybacks of NOL deductions. 
C) Keep the consolidated group from benefiting when the election to consolidate is motivated chiefly by tax reduction strategies. 
D) All of the above statements describe effects of the consolidated return rules.

Question 16

When the net accumulated taxable losses of a subsidiary exceed the parent's acquisition price,the parent's basis in the subsidiary's stock becomes negative.

Accepted Answer

A) True 
 B)False

Question 17

Forming a Federal consolidated tax return group is a discretionary action by eligible affiliates.List several tax attributes and situations that might make a subsidiary an attractive partner for a parent corporation on a consolidated return.

Accepted Answer

The answer of Forming a Federal consolidated tax return group...

Question 18

List three "intercompany transactions" of a Federal consolidated income tax group.ParentCo owns all of the stock of both SubOne and SubTwo.

Accepted Answer

The answer of List three "intercompany transactions" of a Federal...

Question 19

The consolidated tax return regulations use "SRLY" limitations with respect to losses of a subsidiary that can be deducted on the consolidated return.Describe the various SRLY rules that might apply to a consolidated group member's losses.

Accepted Answer

The answer of The consolidated tax return regulations use "SRLY"...

Question 20

Members of a parent-subsidiary controlled group must share one $40,000 ____________________ for the tax year.

Accepted Answer

The answer of Members of a parent-subsidiary controlled group must...

Exam 8: Consolidated Tax Returns

If,on joining an affiliated group,SubCo has a different tax year than that of ParentCo,SubCo must switch its year-end to ParentCo's by the end of the ____________________ (first,second,etc. )tax year after the election to consolidate. or

An affiliated group aggregates its separate charitable contributions,deductions for which then are subject to an annual limitation of 10% of consolidated taxable income.

The Philstrom consolidated group reported the following taxable income amounts.Parent owns all of the stock of both Junior and Minor.Determine the net operating loss (NOL) that is apportioned to Parent.

Which of the following potentially is a disadvantage of electing to file a Federal corporate income tax consolidated return?

Most of the Federal consolidated income tax return rules are found in detailed sections of the tax Regulations.

The consolidated net operating loss of the Parent Group includes all of the following except:

A Federal consolidated group reports a net operating loss for the year.How is this amount allocated to the various group members? Why is this allocation important?

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

Where are the controlling Federal income tax rules regarding consolidated tax returns to be found? What is the general philosophy of those rules?

ParentCo's controlled group includes the following members.ParentCo owns all of the stock in each of the listed entities.Which entities can join ParentCo in a consolidated return?

The calendar year parent and affiliates must elect to file on a consolidated basis by ____________________ 15 after the first consolidated tax year. or or

The right to file on a consolidated basis is available to a group of corporations when they constitute a "parent-subsidiary affiliated group."

Assume that all of the affiliates in a Federal consolidated group conduct allowable manufacturing activities.Is a domestic production activities deduction (DPAD)available? Who can claim it? How is each member's DPAD,if any,computed?

The Harris consolidated group reports a net operating loss (NOL) for the year.The tax law works to:

When the net accumulated taxable losses of a subsidiary exceed the parent's acquisition price,the parent's basis in the subsidiary's stock becomes negative.

Forming a Federal consolidated tax return group is a discretionary action by eligible affiliates.List several tax attributes and situations that might make a subsidiary an attractive partner for a parent corporation on a consolidated return.

List three "intercompany transactions" of a Federal consolidated income tax group.ParentCo owns all of the stock of both SubOne and SubTwo.

The consolidated tax return regulations use "SRLY" limitations with respect to losses of a subsidiary that can be deducted on the consolidated return.Describe the various SRLY rules that might apply to a consolidated group member's losses.

Members of a parent-subsidiary controlled group must share one $40,000 ____________________ for the tax year.