Calendar Year ParentCo Acquired All of the Stock of SubCo

question 90

Multiple Choice

Calendar year ParentCo acquired all of the stock of SubCo on January 1, year 1, for $1,000,000. The parties immediately elected to file consolidated income tax returns. SubCo generated taxable income of $250,000 for year 1 and paid a dividend of $100,000 to ParentCo. In year 2, SubCo generated an operating loss of $350,000, and in year 3, it produced taxable income of $750,000. As of the last day of year 3, what was ParentCo's basis in the stock of
SubCo?

• A) $1,650,000
• B) $1,550,000
• C) $1,000,000
• D) $0

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Definitions:

Suicide Rates

The number of suicide deaths in a given population and time period, often expressed per 100,000 individuals per year.

Interpersonal Therapy

A short-term form of psychotherapy that focuses on improving interpersonal relationships and communication patterns to alleviate mental health issues.

Antidepressant Medication

Drugs prescribed to relieve symptoms of depression by adjusting the levels of neurotransmitters in the brain.

Anomic Suicide

A concept developed by Emile Durkheim describing a type of suicide that occurs when an individual feels disconnected from society's norms and values.