Match Each of the Following Terms with the Appropriate Description

question 75

Short Answer

Match each of the following terms with the appropriate description, in the context of a consolidated Federal income tax return.
a.Advantage of consolidating
b.Disadvantage of consolidating
-Eliminate taxation of intercompany dividend distributions

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Definitions:

Principal Amount

The original sum of money borrowed in a loan, or invested, upon which interest is calculated.

Loan Term

The length of time over which a loan agreement is scheduled to be repaid.

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a predetermined call price.

Deferred Call Provision

A clause in a bond contract that protects the bond issuer from calling (repurchasing) the bond for a specified period, providing stability to the bondholder.