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1 Chapter 8: Consolidated Tax Returns
CONSOLIDATIONS (1of2) Affiliated groups Advantages disadvantages of consolidating Consolidated taxable income Consolidated regular tax liability Consolidated AMT liability
2 CONSOLIDATIONS (1 of 2) Affiliated groups Advantages & disadvantages of consolidating Consolidated taxable income Consolidated regular tax liability Consolidated AMT liability
CONSOLIDATIONS (2of2) Intercompany transactions Consolidated dividends Consolidated charitable contributions Consolidated nols Other consolidated items Stock basis adjustments 3
3 CONSOLIDATIONS (2 of 2) Intercompany transactions Consolidated dividends Consolidated charitable contributions Consolidated NOLs Other consolidated items Stock basis adjustments
Affiliated Groups (1of3) Parent must directly own 80% of voting power &80% of total value of stock of at least one subsidiary Parent other group members must own 80% of the voting power 80% of value of each corporation to be included in the group
4 Affiliated Groups (1 of 3) Parent must directly own 80% of voting power & 80% of total value of stock of at least one subsidiary Parent & other group members must own 80% of the voting power & 80% of value of each corporation to be included in the group
Affiliated Groups (2of3) Excluded corporations Tax exempts under§501 Insurance companies Foreign corporations Corporations claiming 8 936 possessions tax credit 5
5 Affiliated Groups (2 of 3) Excluded corporations –Tax exempts under §501 – Insurance companies –Foreign corporations –Corporations claiming §936 possessions tax credit