J Files a Separate Return for 2012 with an Operating

question 14

Multiple Choice

J files a separate return for 2012 with an operating loss of $5,000.For 2013, J purchases all of the outstanding stock of D corporation.J has taxable income of $3,000 in 2013 and D has income of $1,000.Under the "lonely parent rule," how much of J Corporation's loss carryover may be used on the consolidated tax return?

• A)$4,000
• B)$3,000
• C)$2,000
• D)$1,000

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Definitions:

Excise Tax

A tax charged on specific goods, services, and activities, often included in the price of the product.

Buyers

Individuals or entities that acquire goods or services in exchange for monetary payment.

Sellers

Individuals or entities that offer goods or services for sale in the marketplace.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied at those prices.