Cooper Corporation joined the Duck consolidated Federal income tax return group, when Cooper held a $1 million NOL carryforward. In its first year as a part of the Duck group, Cooper generated a $150,000 taxable profit. For that year, Duck can deduct up to $150,000 of Cooper's NOL in computing consolidated taxable income.

Question

Quizplus · Accepted Answer

When a company joins a consolidated group with a NOL carryforward, the group can deduct the NOL up to the amount of taxable income generated by the company in the current year. Since Cooper generated a $150,000 taxable profit, Duck can deduct up to $150,000 of Cooper's NOL to reduce the group's taxable income. Therefore, the statement is true.

Cooper Corporation Joined the Duck Consolidated Federal Income Tax Return