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.
A) $91,000
B) $100,800
C) $112,000
D) $122,000

Question

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.
A) $91,000 
B) $100,800 
C) $112,000 
D) $122,000

Quizplus · Accepted Answer

- ParentCo's taxable income: $60,000
- SubCo's taxable loss: $20,000
- Intercompany dividends received deduction: $5,800
- Consolidated taxable income: ($60,000 - $20,000 - $5,800) = $34,200
- Add back SubCo's taxable loss: $34,200 - (-$20,000) = $54,200
- Add back ParentCo's taxable income: $54,200 + $60,000 = $114,200
- Subtract intercompany dividends paid deduction: $114,200 - $13,400 = $100,800.

ParentCo and SubCo Had the Following Items of Income and Deduction