Cooper Corporation joined the Duck consolidated Federal income tax return group when Cooper held a $1 million NOL carryforward. In its first year as a part of the Duck group, Cooper generated a $150,000 taxable loss. For that year, Duck cannot deduct any of Cooper's NOL in computing consolidated taxable income.

Question

Quizplus · Accepted Answer

When a corporation joins a consolidated group, its pre-existing NOL carryforwards can only be used to offset its own income, not the income of the group.

Cooper Corporation Joined the Duck Consolidated Federal Income Tax Return