Blitzer Corporation Is the Parent Corporation of a 10-Member Group

question 79

Essay

Blitzer Corporation is the parent corporation of a 10-member group that has filed consolidated tax returns for a number of years. Last year, the group sold all the stock of Wolf Corporation to Jerry Jensen. This year, Wolf Corporation reported a $300,000 NOL. Wolf's taxable income while a group member averaged $200,000 annually for the past five years but is expected to be only $50,000 next year due to start-up costs that will be incurred with the introduction of a new product line. Profits are expected to increase in each succeeding year. What issues should Blitzer have considered when trying to value Wolf's NOL prior to its sale? What tax issues should Wolf now consider when deciding how to use its NOL?

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Definitions:

Endogamy

The tendency of people to marry within their own social group.

Socioeconomic Status

A measure of an individual's or group's economic and social position based on income, education, and occupation.

Interracial Couples

Relationships between people of different racial backgrounds.

Relationship Satisfaction

describes the degree of happiness and fulfillment partners feel within their romantic relationship.