Alto and Bass Corporations have filed consolidated tax returns for several calendar years.At the close of business on September 30,Alto Corporation sells all of the Bass Corporation stock.What portion of Alto's and Bass's income for the current year will be included in the consolidated return,assuming its income is earned evenly throughout the year and all months have 30 days?
D)none of the above

Question

Quizplus · Accepted Answer

When Alto sells all of the Bass Corporation stock on September 30th, their tax statuses are no longer consolidated. Therefore, the current year's income earned by Bass Corporation from January 1st to September 30th would be included in the consolidated return, as Alto still owned the corporation during that time. However, the income earned by Bass Corporation from October 1st to December 31st would not be included in the consolidated return, as it was no longer owned by Alto during that time. Alto Corporation's income for the entire year (January 1st to December 31st) would be included in the consolidated return, as it was not sold during the year. Option B correctly reflects this calculation.

Alto and Bass Corporations Have Filed Consolidated Tax Returns for Several