X and Its Subsidiary B File a Consolidated Tax Return

question 34

Multiple Choice

X and its subsidiary B file a consolidated tax return for 2012.During the year, B distributes $15,000 cash to X.X's basis in its B stock is $9,000, and B has current earning and profits for its first year of $6,000.For 2012, no gain is recognized.How much will go to an excess loss account?

• A)$0
• B)$1,000
• C)$6,000
• D)$10,000
• E)$15,000

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Definitions:

Identity Development

The formation of a distinct personality of an individual regarded as a persisting entity in a particular stage of life in which various factors contribute to one's sense of self.

Commitment

The state or quality of being dedicated to a cause, activity, or relationship, showing a willingness to stay engaged over time.

Foreclosure

A legal process by which a lender tries to recover the balance of a loan from a borrower who has stopped making payments by forcing the sale of the asset used as the collateral for the loan.

Psychosocial Stage

A stage in Erik Erikson's theory of human development, where each stage is characterized by a specific psychological challenge that contributes to a person's social and psychological growth.