Parent and Subsidiary Corporations form an affiliated group.In 2018,the initial year of operation,Parent and Subsidiary filed separate returns.In 2019,the group files a consolidated return. Taxable Income
$$\begin{array} { | l | r | r | }
\hline & { \mathbf { 2 0 1 8 } } & \mathbf { 2 0 1 9 } \
\hline \text { Parent } & ( \$ 16,000 ) & \$ 20,000 \
\hline \text { Subsidiary } & 10,000 & ( 21,000 ) \
\hline
\end{array}$$ How much of the Subsidiary loss can be carried back to last year?
A)$0
B)$1,000
C)$10,000
D)none of the above

Question

Parent and Subsidiary Corporations form an affiliated group.In 2018,the initial year of operation,Parent and Subsidiary filed separate returns.In 2019,the group files a consolidated return. Taxable Income
$$\begin{array} { | l | r | r | } 
\hline & { \mathbf { 2 0 1 8 } } & \mathbf { 2 0 1 9 } \
\hline \text { Parent } & ( \$ 16,000 ) & \$ 20,000 \
\hline \text { Subsidiary } & 10,000 & ( 21,000 ) \
\hline
\end{array}$$ How much of the Subsidiary loss can be carried back to last year?
A)$0
B)$1,000
C)$10,000
D)none of the above

Quizplus · Accepted Answer

In 2019, the group files a consolidated return, so the subsidiary's 2019 loss cannot be carried back to 2018 when separate returns were filed.

Parent and Subsidiary Corporations Form an Affiliated Group How Much of the Subsidiary Loss Can Be Carried Back