Question 1

Match each of the following items with the appropriate description, indicating whether the item increases or decreases the parent's basis in the stock of a subsidiary.
a.Increases stock basis
b.Decreases stock basis
c.No effect on stock basis
-Dividend paid to parent out of parent E & P

Accepted Answer

The answer of Match each of the following items with...

Question 2

Match each of the following items with the appropriate description, indicating whether the item increases or decreases the parent's basis in the stock of a subsidiary.
a.Increases stock basis
b.Decreases stock basis
c.No effect on stock basis
-Increase in the excess loss account

Accepted Answer

The answer of Match each of the following items with...

Question 3

The parent and affiliates are listed on Form ____________________ accompanying the first consolidated Form 1120 that is filed.

Accepted Answer

The answer of The parent and affiliates are listed on...

Question 4

Match each of the following terms with the appropriate description, in the context of a consolidated Federal income tax return.
a.Advantage of consolidating
b.Disadvantage of consolidating
-Conformity of affiliates' tax year ends

Accepted Answer

The answer of Match each of the following terms with...

Question 5

Match each of the following items with the appropriate description, indicating whether the item increases or decreases the parent's basis in the stock of a subsidiary.
a.Increases stock basis
b.Decreases stock basis
c.No effect on stock basis
-Member's operating loss

Accepted Answer

A member's operating loss decreases the parent's basis in the stock of a subsidiary because the loss reflects a reduction in the value of the subsidiary, which is then reflected in the parent's investment value.

Question 6

Match each of the following items with the appropriate description, indicating whether the item is computed on a group basis on a consolidated tax return.
a.Group item
b.Not a group item
-ACE adjustment

Accepted Answer

The answer of Match each of the following items with...

Question 7

Most of the rules governing the use of consolidated returns are found in _________________________ regulations adopted since 1969.

Accepted Answer

The answer of Most of the rules governing the use...

Question 8

Match each of the following items with the appropriate description, indicating whether the item is computed on a group basis on a consolidated tax return.
a.Group item
b.Not a group item
-Compensation deductions

Accepted Answer

The answer of Match each of the following items with...

Question 9

Match each of the following terms with the appropriate description, in the context of a consolidated Federal income tax return.
a.Advantage of consolidating
b.Disadvantage of consolidating
-Joint and several liability for Federal income tax

Accepted Answer

Joint and several liability for Federal income tax is considered a disadvantage of consolidating because each member of the consolidated group can be held responsible for the entire group's tax liability, not just their own portion.

Question 10

Match each of the following items with the appropriate description, indicating whether the item is computed on a group basis on a consolidated tax return.
a.Group item
b.Not a group item
-Domestic production activities deduction (DPAD)

Accepted Answer

The answer of Match each of the following items with...

Question 11

Match each of the following items with the appropriate description, indicating whether the item increases or decreases the parent's basis in the stock of a subsidiary.
a.Increases stock basis
b.Decreases stock basis
c.No effect on stock basis
-Member's operating gains/profits

Accepted Answer

Member's operating gains or profits increase the parent's basis in the stock of a subsidiary because these gains increase the value of the subsidiary, which is reflected in the parent's investment value.

Question 12

An affiliated group exists where there is ____________________ percent ownership of all of the affiliates within the group,and there is an identifiable ____________________ corporation.

Accepted Answer

The answer of An affiliated group exists where there is...

Question 13

Match each of the following terms with the appropriate description, in the context of a consolidated Federal income tax return.
a.Advantage of consolidating
b.Disadvantage of consolidating
-Eliminate taxation of intercompany dividend distributions

Accepted Answer

The answer of Match each of the following terms with...

Question 14

When an affiliated group elects to file Federal consolidated income tax returns,it gives up the ability to claim a __________ __________ deduction for distributions of profits among the members.

Accepted Answer

The answer of When an affiliated group elects to file...

Question 15

Match each of the following items with the appropriate description, indicating whether the item is computed on a group basis on a consolidated tax return.
a.Group item
b.Not a group item
-Cost of goods sold

Accepted Answer

The answer of Match each of the following items with...

Question 16

Deferring recognition of an intercompany gain is one _________________________ (advantage/disadvantage)of electing to file consolidated returns.

Accepted Answer

The answer of Deferring recognition of an intercompany gain is...

Question 17

Match each of the following items with the appropriate description, indicating whether the item is computed on a group basis on a consolidated tax return.
a.Group item
b.Not a group item
-Interest income received from U.S.Treasury bills

Accepted Answer

The answer of Match each of the following items with...

Question 18

Match each of the following items with the appropriate description, indicating whether the item is computed on a group basis on a consolidated tax return.
a.Group item
b.Not a group item
-Charitable contribution

Accepted Answer

The answer of Match each of the following items with...

Question 19

Match each of the following items with the appropriate description, indicating whether the item increases or decreases the parent's basis in the stock of a subsidiary.
a.Increases stock basis
b.Decreases stock basis
c.No effect on stock basis
-Member's operating loss,when stock basis = $0

Accepted Answer

The answer of Match each of the following items with...

Question 20

One of the motivations for the consolidated return rules is for Congress to discourage conglomerates from __________ in the net operating losses of other entities.

Accepted Answer

The answer of One of the motivations for the consolidated...

Quiz 8: Consolidated Tax Returns

Match each of the following items with the appropriate description, indicating whether the item increases or decreases the parent's basis in the stock of a subsidiary. a.Increases stock basis b.Decreases stock basis c.No effect on stock basis -Dividend paid to parent out of parent E & P

Match each of the following items with the appropriate description, indicating whether the item increases or decreases the parent's basis in the stock of a subsidiary. a.Increases stock basis b.Decreases stock basis c.No effect on stock basis -Increase in the excess loss account

The parent and affiliates are listed on Form ____________________ accompanying the first consolidated Form 1120 that is filed.

Match each of the following terms with the appropriate description, in the context of a consolidated Federal income tax return. a.Advantage of consolidating b.Disadvantage of consolidating -Conformity of affiliates' tax year ends

Match each of the following items with the appropriate description, indicating whether the item increases or decreases the parent's basis in the stock of a subsidiary. a.Increases stock basis b.Decreases stock basis c.No effect on stock basis -Member's operating loss

Match each of the following items with the appropriate description, indicating whether the item is computed on a group basis on a consolidated tax return. a.Group item b.Not a group item -ACE adjustment

Most of the rules governing the use of consolidated returns are found in _________________________ regulations adopted since 1969.

Match each of the following items with the appropriate description, indicating whether the item is computed on a group basis on a consolidated tax return. a.Group item b.Not a group item -Compensation deductions

Match each of the following terms with the appropriate description, in the context of a consolidated Federal income tax return. a.Advantage of consolidating b.Disadvantage of consolidating -Joint and several liability for Federal income tax

Match each of the following items with the appropriate description, indicating whether the item is computed on a group basis on a consolidated tax return. a.Group item b.Not a group item -Domestic production activities deduction (DPAD)

Match each of the following items with the appropriate description, indicating whether the item increases or decreases the parent's basis in the stock of a subsidiary. a.Increases stock basis b.Decreases stock basis c.No effect on stock basis -Member's operating gains/profits

An affiliated group exists where there is percent ownership of all of the affiliates within the group,and there is an identifiable corporation.

Match each of the following terms with the appropriate description, in the context of a consolidated Federal income tax return. a.Advantage of consolidating b.Disadvantage of consolidating -Eliminate taxation of intercompany dividend distributions

When an affiliated group elects to file Federal consolidated income tax returns,it gives up the ability to claim a deduction for distributions of profits among the members.

Match each of the following items with the appropriate description, indicating whether the item is computed on a group basis on a consolidated tax return. a.Group item b.Not a group item -Cost of goods sold

Deferring recognition of an intercompany gain is one _________________________ (advantage/disadvantage)of electing to file consolidated returns.

Match each of the following items with the appropriate description, indicating whether the item is computed on a group basis on a consolidated tax return. a.Group item b.Not a group item -Interest income received from U.S.Treasury bills

Match each of the following items with the appropriate description, indicating whether the item is computed on a group basis on a consolidated tax return. a.Group item b.Not a group item -Charitable contribution

Match each of the following items with the appropriate description, indicating whether the item increases or decreases the parent's basis in the stock of a subsidiary. a.Increases stock basis b.Decreases stock basis c.No effect on stock basis -Member's operating loss,when stock basis = $0

One of the motivations for the consolidated return rules is for Congress to discourage conglomerates from __________ in the net operating losses of other entities.