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

question 47

Multiple Choice

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

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Definitions:

Antitrust Laws

Legislation intended to promote competition and prevent monopolies and unfair business practices.

Competitive Economy

An economic system where many firms compete to sell their goods and services, with minimal barriers to entry and exit.

Elasticity Of Demand

An indicator of the sensitivity of demand for a product to fluctuations in its price.

Marginal Cost

The additional total expense that results from the creation of one more unit of a product or service.