Perhaps the Most Important Advantage of a Consolidated Return Is

question 26

True/False

Perhaps the most important advantage of a consolidated return is that the net operating losses of one group member can be used currently to offset the taxable income of another member.It is only when the sum of the separate NOLs exceeds the sum of the separate taxable incomes that a consolidated NOL results.The consolidated NOL may be carried back or forward.

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Definitions:

Interest Allowance

A provision or adjustment made for the calculation of interest receivable or payable over a specified period.

Fixed Ratio

A prescribed relationship between two quantities, expressed as a constant value.

Net Income

The total earnings of a company after deducting all costs and expenses from revenue, indicating the company's profitability.

Liquidation

The process of closing a business by selling its assets to pay off its liabilities, with any remaining proceeds distributed to shareholders or owners.