ParentCo, SubOne and SubTwo Have Filed Consolidated Returns Since 2011

question 105

Multiple Choice

ParentCo, SubOne and SubTwo have filed consolidated returns since 2011. All of the entities were incorporated in 2010. 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. How should the 2012 consolidated net operating loss be apportioned among the group members?
ParentCo SubOne SubTwo

• A) $60,000 $ 0 $ 0
• B) $20,000 $20,000 $20,000
• C) $ 0 $20,000 $40,000
• D) $ 0 $40,000 $20,000

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Definitions:

Womb

The organ in female mammals where offspring are conceived and in which they gestate before birth; the uterus.

Fetal Alcohol Syndrome

A condition in a child that results from alcohol exposure during the mother's pregnancy, causing growth problems, facial deformities, and neurodevelopmental issues.

Facial Characteristic

Distinctive features of a person’s face, such as shape, expressions, and proportions, that identify individual traits.

Maternal Cocaine Use

The consumption of cocaine by a pregnant woman, which can have harmful effects on the fetus, including developmental issues and birth defects.