The Olson Losses Offset the Holloway Income Dollar for Dollar

The Olson losses offset the Holloway income dollar for dollar, but they do not become large enough to produce a consolidated loss. Because both corporations produce ordinary income, there are no adjustments to make using the format of Exhibit 8.3. There are no consolidated NOL carryovers in any of the specified years.
-For each of the indicated tax years. compute consolidated taxable income for the calendar year Whitman Group, which elected consolidated status immediately upon creation of the two member corporations in January Year 1. All recognized income related to the data processing services of the firms. No intercompany transactions were completed during the indicated years. $\begin{array}{|l|c|c|}\hline\text { Tax Year } & \text { Whitman Corp oration } & \text { Drap er Corporation } \\\hline \text { Year 1 } & \$ 250,000 & \$ 90,000 \\\hline \text { Year 2 } & 250,000 & (170,000) \\\hline \text { Year 3 } & 250,000 & (560,000) \\\hline \text { Year 4 } & 250,000 & 145,000 \\\hline\end{array}$