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Unformatted text preview: consolidated return.
Examples of those that are denied the privilege include:
(1) S corporations,
(2) Foreign corporations,
(3) Most real estate investment trusts (REITs),
(4) Some insurance companies, and
(5) Most exempt organizations.
Choice "d" is correct. To summarize the facts in the question, the ownership percentage rules are met for
all corporations. A, C, and D are all C corporations, and B Corp is an S corporation. Jans owns A and B;
A owns C; and B owns D. Per the rules above, S corporations are denied the privilege of filing a
consolidated return. Therefore, B Corp. cannot file a consolidated return. A and C may file a
consolidated return, as Jans controls A, and A controls C in the required percentages and both are
includible corporations. However, the control of D rests with B, an S corporation. Therefore, D cannot be
consolidated with A or C, and because B cannot file a consolidated return (as it is an S corporation), D
cannot file consolidated with B. Therefore, A and C may file as a group, but B and D may not file as a
Choice "a" is incorrect. Per the above rules, D cannot file as a group with A and C, as the control of D
rests with B, an S corporation that is not deemed an includible corporation.
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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