Parent Corporation owns all of the stock of Richards and Smith Corporations on January 1. The three corporations have filed consolidated tax returns for a number of calendar years. Parent sells all of the stock of Richards Corporation on June 1. Parent purchases all of the stock of Taylor Corporation on September 1. Parent sells all of the stock of Smith Corporation on November 1. When does the affiliated group terminate?
A)June 1
B)September 1
C)November 1
D)The original affiliated group does not terminate.

Question

Quizplus · Accepted Answer

The original affiliated group does not terminate because Parent Corporation still owns all of the stock of Taylor Corporation, which is an affiliated corporation.

Parent Corporation Owns All of the Stock of Richards and Smith