ParentCo, SubOne, and SubTwo have filed consolidated returns since year 2. All of the entities were incorporated in Taxable income computations for the members include the following. None of the group members incurred any capita transactions during these years, nor did they make any charitable contributions. $$\begin{array} { l c c c c }
\text { Year } & \begin{array} { c }
\text { ParentCo's } \
\text { Taxable Income }
\end{array} & \begin{array} { c }
\text { SubOne's Taxable } \
\text { Income }
\end{array} & \begin{array} { c }
\text { SubTwo's Taxable } \
\text { Income }
\end{array} & \begin{array} { c }
\text { Consolidated } \
\text { Taxable Income }
\end{array} \
\text { Year 1 } & \$ 200,000 & \$ 50,000 & \$ 150,000 & \text { N/A } \
\text { Year 2 } & \$ 200,000 & ( \$ 60,000 ) & \$ 70,000 & \$ 210,000 \
\text { Year 3 } & \$ 20,000 & ( \$ 60,000 ) & ( \$ 40,000 ) & ? \
\text { Year 4 } & \$ 200,000 & \$ 130,000 & \$ 10,000 & ?
\end{array}$$ How should the Year 3 consolidated net operating loss be apportioned among the group members?

Question

ParentCo, SubOne, and SubTwo have filed consolidated returns since year 2. All of the entities were incorporated in Taxable income computations for the members include the following. None of the group members incurred any capita transactions during these years, nor did they make any charitable contributions. $$\begin{array} { l c c c c } 
\text { Year } & \begin{array} { c } 
\text { ParentCo's } \
\text { Taxable Income }
\end{array} & \begin{array} { c } 
\text { SubOne's Taxable } \
\text { Income }
\end{array} & \begin{array} { c } 
\text { SubTwo's Taxable } \
\text { Income }
\end{array} & \begin{array} { c } 
\text { Consolidated } \
\text { Taxable Income }
\end{array} \
\text { Year 1 } & \$ 200,000 & \$ 50,000 & \$ 150,000 & \text { N/A } \
\text { Year 2 } & \$ 200,000 & ( \$ 60,000 ) & \$ 70,000 & \$ 210,000 \
\text { Year 3 } & \$ 20,000 & ( \$ 60,000 ) & ( \$ 40,000 ) & ? \
\text { Year 4 } & \$ 200,000 & \$ 130,000 & \$ 10,000 & ?
\end{array}$$ How should the Year 3 consolidated net operating loss be apportioned among the group members?

Quizplus · Accepted Answer

The Answer of ParentCo, SubOne, and SubTwo have filed consolidated returns since year 2. All of the entities were incorporated in Taxable income computations for the members include the following. None of the group members incurred any capita transactions during these years, nor did they make any charitable contributions. $$\begin{array} { l c c c c } 
\text { Year } & \begin{array} { c } 
\text { ParentCo's } \
\text { Taxable Income }
\end{array} & \begin{array} { c } 
\text { SubOne's Taxable } \
\text { Income }
\end{array} & \begin{array} { c } 
\text { SubTwo's Taxable } \
\text { Income }
\end{array} & \begin{array} { c } 
\text { Consolidated } \
\text { Taxable Income }
\end{array} \
\text { Year 1 } & \$ 200,000 & \$ 50,000 & \$ 150,000 & \text { N/A } \
\text { Year 2 } & \$ 200,000 & ( \$ 60,000 ) & \$ 70,000 & \$ 210,000 \
\text { Year 3 } & \$ 20,000 & ( \$ 60,000 ) & ( \$ 40,000 ) & ? \
\text { Year 4 } & \$ 200,000 & \$ 130,000 & \$ 10,000 & ?
\end{array}$$ How should the Year 3 consolidated net operating loss be apportioned among the group members?

ParentCo, SubOne, and SubTwo Have Filed Consolidated Returns Since Year