Parent Corporation, SubOne, and SubTwo have filed consolidated returns since 2013. All of the entities were incorporated in 2012. None of the group members incurred any capital gain or loss transactions during 2012-2015, nor did they make any charitable contributions. Taxable income computations for the members are listed below.
* Separate return year.
** Consolidated return year.
a. How much of the 2014 loss is apportioned to SubOne and SubTwo? How is this loss treated in generating a refund of prior tax payments?
b. Why would Parent consider electing to forgo the carryback of the 2014 consolidated NOL?
c. In this light, analyze the election to consolidate.

Question

Parent Corporation, SubOne, and SubTwo have filed consolidated returns since 2013. All of the entities were incorporated in 2012. None of the group members incurred any capital gain or loss transactions during 2012-2015, nor did they make any charitable contributions. Taxable income computations for the members are listed below.
  * Separate return year.
** Consolidated return year. 
a. How much of the 2014 loss is apportioned to SubOne and SubTwo? How is this loss treated in generating a refund of prior tax payments?
b. Why would Parent consider electing to forgo the carryback of the 2014 consolidated NOL?
c. In this light, analyze the election to consolidate.

Quizplus · Accepted Answer

The Answer of Parent Corporation, SubOne, and SubTwo have filed consolidated returns since 2013. All of the entities were incorporated in 2012. None of the group members incurred any capital gain or loss transactions during 2012-2015, nor did they make any charitable contributions. Taxable income computations for the members are listed below.
  * Separate return year.
** Consolidated return year. 
a. How much of the 2014 loss is apportioned to SubOne and SubTwo? How is this loss treated in generating a refund of prior tax payments?
b. Why would Parent consider electing to forgo the carryback of the 2014 consolidated NOL?
c. In this light, analyze the election to consolidate.

Parent Corporation, SubOne, and SubTwo Have Filed Consolidated Returns Since