Match each of the following terms with the appropriate description in the context of a consolidated Federal income tax return.
-Loss deferral on intercompany transactions.
A)Advantage of consolidating
B)Disadvantage of consolidating
C)Neither an advantage nor a disadvantage

Question

Quizplus · Accepted Answer

Loss deferral on intercompany transactions is considered a disadvantage of consolidating because it prevents the recognition of losses on transactions between companies within the consolidated group until those items are sold to an outside party. This can delay tax benefits that might otherwise be available.

Match Each of the Following Terms with the Appropriate Description