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Unformatted text preview: lidated basis may file
c. Of all intercompany dividends paid by the subsidiaries to the parent, 70% are excludible from taxable
income on the consolidated return.
d. The common parent must directly own 51% or more of the total voting power of all corporations
included in the consolidated return.
Choice "a" is correct. A significant advantage of consolidated tax returns is the ability to offset gains and
losses among group members as if they were a single taxpayer.
Choice "b" is incorrect. Corporations need not have audited financial statements issued on a
consolidated basis to file a consolidated tax return.
Choice "c" is incorrect. 100% of dividends received by the parent are eliminated on a consolidated tax
Choice "d" is incorrect. The common parent must own directly or indirectly 80% of the total voting power
of all corporations included in the consolidated tax return. CPA-02114 Type1 M/C A-D Corr Ans: A PM#53 R 3-01 1...
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- Fall '10
- The Land