ParentCo and SubCo Had the Following Items of Income and Deduction

question 8

Multiple Choice

ParentCo and SubCo had the following items of income and deduction for the current year: $\begin{array}{ccc} & \text { ParentCo's } & \text { SubCo's Taxable } \\\text { Item } & \text { Taxable Income } & \text { Income } \\\hline \text { Income (loss) from Operations }&\$170,000&\$45,000\\\S 1231 \text { Loss }&(45,000) &40,000\\\text { Charitable Contribution }&25,000&15,000\end{array}$ Compute ParentCo and SubCo's consolidated taxable income or loss.

• A)$215,000
• B)$210,000.
• C)$189,000.
• D)$170,000.
• E)None of the above.

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Definitions:

Seconal

A brand name for secobarbital, a barbiturate drug used as a sedative and hypnotic medication.

Morphine

A powerful opiate analgesic drug derived from the opium poppy, used to relieve severe pain.

Narcolepsy

A sleep disorder characterized by uncontrollable episodes of falling asleep during the daytime.

Sleep Terror

A sleep disorder causing feelings of panic or dread, typically occurring during the first hours of stage 3-4 non-REM sleep and often remembered only partially.