(TCO 6) ParentCo's separate taxable income was $350,000, and SubCo's was
$225,000. Consolidated taxable income before contributions was $400,000.
Charitable contributions made by the affiliated group included $15,000 by ParentCo
and $20,000 by SubCo. Compute the group's charitable contribution deduction.
Some other amount
10% X $400,000, but not to exceed the total gifts.
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(TCO 6) Which of the following is eligible to file Federal tax returns on a
U.S. corporation engaged in multinational operations.
Japanese corporation engaged in multinational operations,
including two-thirds of its activities in the U.S.
A tax-exempt hospital.
A partnership operating exclusively in North America
None of the above can file consolidated returns.
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(TCO 6) ParentCo acquired all of the stock of SubCo on January 1, 2007, for
$1,000,000. The parties immediately elected to file consolidated tax returns.
SubCo generated taxable income of $60,000 for 2007 and paid a dividend of
$25,000 to ParentCo. In 2008, SubCo generated an operating loss of $180,000,
and in 2009 produced taxable income of $65,000. As of the last day of 2009, what
was ParentCo’s basis in the stock of SubCo?
ParentCo’s initial stock basis was $1,000,000. Positive adjustments to basis
include the $60,000 income for 2006 and the $65,000 of income for 2009. Negative
adjustments to basis include the $25,000 dividend paid to ParentCo in 2007 and the
$180,000 loss in 2008.