The Maestro 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. $$\begin{array} { l c }
\text { Parent } & ( \$ 400,000 ) \
\text { Junior } & ( \$ 600,000 ) \
\text { Minor } & \$ 100,000
\end{array}$$
A)$360,000.
B)$400,000.
C)$500,000.
D)$900,000. All NOLs of a consolidated group are apportioned to the parent.

Question

The Maestro 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. $$\begin{array} { l c } 
\text { Parent } & ( \$ 400,000 ) \
\text { Junior } & ( \$ 600,000 ) \
\text { Minor } & \$ 100,000
\end{array}$$
A)$360,000.
B)$400,000.
C)$500,000.
D)$900,000. All NOLs of a consolidated group are apportioned to the parent.

Quizplus · Accepted Answer

The NOL of a consolidated group is apportioned to the parent. The parent's share of the NOL is determined by its ownership interest in the group. In this case, the parent owns all of the stock of both Junior and Minor. Therefore, the parent's share of the NOL is 100%. The NOL of the group is $1,000,000 ($400,000 + $600,000 - $100,000). Therefore, the parent's share of the NOL is $1,000,000 x 100% = $1,000,000.