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Accounting 6120. Corporate Taxation – Examination no. 3-Night Class
The University of North Carolina at Charlotte
You may use your code and regs book during the test.
You may also use up to 4 pages of
notes-front and back, as well as any outlines of code provided by the instructor in class or on the web page.
You may not use your regular tax textbook when answering questions on this test. Avoid all appearances of
Consolidated returns may be filed by:
Either by parent-subsidiary corporations or by brother-sister corporations.
Only by corporations that formally request advance permission from the IRS.
Two corporations when the first one owns: stock having at least 51% of the voting power of the
second corporation and stock having at least 51% of the value all stock of the second corporation.
Two corporations when the first one owns: stock having at least 80% of the voting power of the second
corporation and stock having at least 80% of the value all stock of the second corporation.
In 2010, Parent bought all of stock of Local Corp., which continued to operate as a subsidiary of Parent.
They have provided the following partially completed worksheet for computation of consolidated taxable
income. The two corporations have not had capital gains or losses or Section 1231 gains or losses before 2011.
Year - 2011
Gross income from operations
Other deductible operating expenses
Separate taxable income
Items not included above
Capital loss on sale of IBM stock
Section 1231 loss – sale of land used in business
Consolidated taxable income
What is consolidated taxable income for 2011?
Charlotte Corp. and Concord Corp. file consolidated tax returns.
In January 2010, Charlotte sold land, with a
basis of $60,000 and a fair value of $100,000, to Concord for $100,000.
Concord sold the land in December
2011 for $150,000.
In the consolidated group’s 2011 and 2010 tax returns, what amount of gain should be
reported for these transactions in the consolidated return?