Keep Corporation joined an affiliated group by merger in 2014. The group generated a consolidated 2014 NOL, and Keep's share of the loss was $50,000. Lacking an election by the parent to the contrary, Keep can carry the loss back to its separate 2012 return, and the parent can claim a tax refund.

Question

Quizplus · Accepted Answer

In a consolidated group, net operating losses (NOLs) are typically carried back or forward at the group level, not at the individual member level. Keep Corporation cannot carry back its share of the loss to its separate return; the parent company manages the NOL for the entire group.

Keep Corporation Joined an Affiliated Group by Merger in 2014