Parent Corporation Owns All of the Stock of Richards and Smith

question 73

Multiple Choice

Parent Corporation owns all of the stock of Richards and Smith Corporations on January 1. The three corporations have filed consolidated tax returns for a number of calendar years. Parent sells all of the stock of Richards Corporation on June 1. Parent purchases all of the stock of Taylor Corporation on September 1. Parent sells all of the stock of Smith Corporation on November 1. When does the affiliated group terminate?

• A)June 1
• B)September 1
• C)November 1
• D)The original affiliated group does not terminate.

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Definitions:

Grignard Reaction

A chemical reaction in which an alkyl, vinyl, or aryl-magnesium halide (Grignard reagent) adds to a carbonyl group in an aldehyde or ketone.

Epoxide

A cyclic ether with a three-atom ring, consisting of an oxygen atom and two carbon atoms.

Aldehyde

Organic compounds characterized by the presence of a carbonyl group bonded to at least one hydrogen atom.

Ketone

An organic compound characterized by a carbonyl group bonded to two other carbon atoms; important in organic chemistry and biology.