ParentCo and SubOne Have Filed Consolidated Returns Since 2006

question 29

Multiple Choice

ParentCo and SubOne have filed consolidated returns since 2006.SubTwo was formed in 2009 through an asset spin-off from ParentCo.SubTwo has joined in the filing of consolidated returns since then.Taxable income computations for the members include the following.None of the group members incurred any capital gain or loss transactions during these years,nor did they make any charitable contributions.

If ParentCo does not elect to forgo the carryback of the 2009 net operating loss,what portion of the 2009 consolidated net operating loss is carried back to offset prior years' income?

• A)$120,000.
• B)$90,000.
• C)$40,000.
• D)$30,000.
• E)$0.

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Definitions:

Goodwill

An intangible asset that arises when a buyer acquires an existing business, representing the value of the business's brand, customer base, and other non-physical assets.

Land Improvements

Upgrades made to land such as landscaping, irrigation systems, and construction of pathways that enhance its value and utility.

Buildings

Structures constructed on land that serve various purposes, such as commercial, residential, or industrial activities, often considered as long-term assets in financial accounting.

Land

A natural resource concerning the solid surface of the earth, which is not subject to depreciation.