Entities - C Corporation - Consolidated Tax Return

Question 1

What are the requirements to file a consolidated tax return

Answer 1

Allowed to when one C corporation owns at least 80% of the voting power and value of another C corporation or multiple c corporations
- An S-corp is NOT allowed to be a member of an affiliated group

Question 2

What are the 3 main advantages of filing a consolidated return

Answer 2

1) Inter-company dividends are excluded from taxable income
2) Losses from one-member corporation offset gains of another member
3) inter-company profits are deferred until realized

Question 3

How are dividends treated in a consolidation?

Answer 3

The dividends are eliminated in the consolidation process and are not reported in the consolidated tax