Pants and Skirt Corporations Are Affiliated and Have Filed Consolidated

question 37

Multiple Choice

Pants and Skirt Corporations are affiliated and have filed consolidated tax returns for the past three years.Pants acquires 100% of Zipper stock on January 1 of this year.Zipper Corporation filed separate returns previously.Pants,Skirt,and Zipper filed a consolidated return for the current year and reported the following taxable incomes: The $9,000 consolidated NOL reported in the current year

• A)can offset taxable income of Pants and Skirt Corporations from last year.
• B)can offset Zipper Corporation separate return taxable income only from last year.
• C)can be used only as a carryover to the future.
• D)can offset Zipper Corporation separate return taxable income from last year and then be carried forward to offset the affiliated group's subsequent taxable income.

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Definitions:

Efficient Distribution

The optimal allocation of goods and services to maximize consumer satisfaction and economic efficiency.

Final Products

Goods and services that are consumed by the end-user and do not require further processing.

Free and Open Markets

Economic systems where supply and demand are not hindered by undue restrictions, allowing for free trade and competition.

Efficient Level

The point at which a system operates at maximum productivity with minimum waste and expense.