Corporation Powns 93 percent of the outstanding stock of Corporation T. This year, the corporation's records...

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Corporation Powns 93 percent of the outstanding stock of Corporation T. This year, the corporations records provide the foll

business accounting

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Answer 1

Answer #1

Solution:

a)

	Corporation P's	Corporation T's
	Separate return	Separate return
Ordnary operation income (loss)	$540,000	$(220,000)
Capital gain	0	6,400
Section 1231 gain(loss)	(1,400)	5,800
Capital loss (deductible to extent of capital and section 1231 gain)	0	0
Taxable income (NOL)	$538,600	$(207,800)

b)

	Consolidate return
Ordinary operating income	$518,000
Capital gain	$6,400
Net section 1231 gain	$4,400
Deductible capital loss	($8,700)
taxable income	$520,100

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Answer 2

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