Subsidiary holds an allocated net operating loss NOL) when it leaves the Parent consolidated group. As a result:
A) The group keeps Subsidiary's allocated loss.
B) Subsidiary takes its allocated NOL and uses it on subsequent separate tax returns.
C) The loss is suspended for five years in case Subsidiary rejoins the group; then Parent can use it.
D) The loss is suspended for five years in case Subsidiary rejoins the group. At that time, Subsidiary uses the loss on its separate return.

Question

Quizplus · Accepted Answer

Subsidiary takes its allocated NOL and uses it on subsequent separate tax returns. This allows the subsidiary to apply the NOL to offset future taxable income on its own, separate from the parent company.

Subsidiary Holds an Allocated Net Operating Loss NOL) When It