The purpose of the rules governing intercompany sales on a Federal consolidated tax return is to treat the group as though it is:
A) One company with several divisions.
B) A non-U.S. corporation.
C) A partnership of the various affiliates.
D) Not subject to the related party loss rules.

Question

Quizplus · Accepted Answer

The purpose of the rules governing intercompany sales on a Federal consolidated tax return is to treat the group as though it is one company with several divisions. This is done to prevent tax avoidance through artificial manipulation of prices and to ensure that the group is taxed as a single entity rather than individual companies.

The Purpose of the Rules Governing Intercompany Sales on a Federal