M6: Consolidated Tax Returns

Question 1

Consolidated Tax Returns: DRD

Answer 1

if a corp. owns 80% or more of another corporation, the dividend received deduction is 100% as the dividend income is eliminated in consolidation.

Question 2

Consolidated Corp. Return

Answer 2

an affiliated group may elect to be taxed as a single unit, thereby eliminating intercompany gains and losses. Corp. must have been members of an affiliated group at some time during the tax year and must have filed a consent (the act of filing consolidated return qualifies as consent). An affiliated group is common parents owns 80 percent or more of voting power of all o/s stock and 80 percent or more of all o/s stock of each corp

Question 3

Affiliated group members

Answer 3

80% of the voting power and 80% value of the stock of that corporation