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c. Only corporations that issue their audited financial statements on a consolidated basis may file
consolidated tax returns.
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Becker CPA Review, PassMaster Questions
Lecture: Regulation 3 d. Operating losses of one group member may be used to offset operating profits of the other members
included in the consolidated return.
Choice "d" is correct. Operating losses of one group member of a consolidated return may be used to
offset operating profits of the other members included in the consolidated return.
Choice "a" is incorrect. The common parent must directly own stock possessing at least 80% of the total
voting power of at least one of the other includible corporations and having a value equal to at least 80%
of the total value of the stock of the corporation.
Choice "b" is incorrect. Intercompany dividends are eliminated during the process of consolidation and
are therefore not includible to any extent in the consolidated return taxable income.
Choice "c" is incorrect. No such requirement exists. CPA-02207 Type1 M/C 104. CPA-02207 A-D Nov 89 II #49 Corr Ans: A PM#10 R 3-99 Page 39 Ati Corp. has two common stockholders. Ati derives all of its income from investments in stocks and
securities, and it regularly distributes 51% of its taxable income as dividends to its stockholders. Ati is a:
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.
- Fall '10
- The Land