ParentCo and SubCo Have Filed Consolidated Returns Since Both Entities

question 30

Multiple Choice

ParentCo and SubCo have filed consolidated returns since both entities were incorporated in 2012.Taxable income computations for the members include the following.Neither group member incurred any capital gain or loss transactions during these years,nor did they make any charitable contributions. The 2014 consolidated loss:

• A)must be carried forward,unless an election to forgo carryforward is made by the parent.
• B)must be carried back,unless an election to forgo the carryback is made by the parent.
• C)can be used only to offset SubCo's future income.
• D)cannot be used to offset any of ParentCo's 2012 income.

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Definitions:

Course Of Performance

The history of dealings between the parties in the particular contract at issue.

Perfect Tender Rule

A legal principle that requires goods delivered under a sales contract to exactly meet the specifications agreed upon.

Buyer/Lessee

The individual or entity that purchases or leases goods or property.

Breach

The action of violating or not adhering to a rule, contract, or ethical guideline.