Blair and Cannon Corporations are members of an affiliated group. No prior net Sec. 1231 losses have been reported by any group member. The two corporations report consolidated ordinary income of $100,000 and gains and losses from property transactions as follows. Which of the following statements is correct?

Question

Blair and Cannon Corporations are members of an affiliated group. No prior net Sec. 1231 losses have been reported by any group member. The two corporations report consolidated ordinary income of $100,000 and gains and losses from property transactions as follows.  Which of the following statements is correct?

Quizplus · Accepted Answer

- The consolidated group reports a net short-term capital gain of $1,000 due to $2,000 short-term capital gains from Blair Corporation and $1,000 short-term capital loss from Cannon Corporation.
- Blair Corporation's separate return reports a $4,000 net long-term capital gain based on the given information.
- Cannon Corporation's separate return reports a $1,000 net long-term capital loss due to $2,000 long-term capital loss minus $1,000 long-term capital gain.

Blair and Cannon Corporations Are Members of an Affiliated Group