When a Subsidiary Sells to the Parent Some Business-Use Property

question 64

True/False

When a subsidiary sells to the parent some business-use property that has appreciated from its $20,000 basis to a
$50,000 fair market value, the subsidiary immediately recognizes $30,000 ordinary income on the consolidated return.

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Definitions:

Recessions

Periods of economic decline when real GDP falls for two consecutive quarters, indicating a significant reduction in economic activity across the economy.

Inflation Rate

A rate, described in percentages, indicating how prices for various goods and services are climbing, which in turn decreases the value of money.

GDP Deflator

A measure of the level of prices of all new, domestically produced, final goods and services in an economy, used to deflate or adjust the nominal GDP to real GDP.

Intermediate Good

A product used as an input in the production of a final good or service.