Match each of the following terms with the appropriate description, in the context of a consolidated Federal income tax return.
-Tax treatment of operating losses when the basis of the payor's stock is zero
A)Advantage of consolidating
B)Disadvantage of consolidating
C)Neither an advantage nor a disadvantage

Question

Quizplus · Accepted Answer

When a consolidated Federal income tax return is filed, the operating losses of one member may offset the income of another member, lowering the group's overall tax liability. However, if the basis of the payor's stock is zero, the operating losses may be limited or suspended, resulting in a disadvantage for consolidating.

Match Each of the Following Terms with the Appropriate Description