Consolidated Return Scenario: Company P Purchased an 80% Interest in Company

question 26

Multiple Choice

Consolidated Return Scenario: Company P purchased an 80% interest in Company S on January 1, 20X3, for $800,000. On the purchase date, Company S stockholders' equity was $800,000. Any excess of cost over book value was attributed to a patent with a 10-year remaining life. In 20X3, Company P reported internally generated net income before taxes of $150,000. Company S reported a net income before taxes of $70,000. The firms file a consolidated tax return at a 30% tax rate.
-Refer to the Consolidated Return scenario. The nondeductible portion of excess amortization is

• A) $20,000
• B) $15,000
• C) $4,000
• D) $0 (The amortization is fully deductible)

---

Definitions:

Intimate Terrorism

A pattern of coercively controlling behavior exercised by one partner over another within an intimate relationship.

Patriarchal Tradition

A social system in which men hold primary power and predominate in roles of political leadership, moral authority, and property control.

Gender-neutral

Language, policies, or practices that avoid discrimination by not distinguishing roles according to people's sex or gender identity.

Violence Against Women

Acts of violence that are primarily or exclusively committed against women, often stemming from or reinforcing gender inequality.