Corporation P owns 93 percent of the outstanding stock of Corporation T. This year, the corporation’s records provide the following information: Corporation P Corporation T Ordinary operating income (loss) $ 500,000 $ (200,000) Capital gain (loss) (8,300) 6,000 Section 1231 gain (loss) (1,000) 5,000 Required: Compute each corporation’s taxable income if each files a separate tax return. Compute consolidated taxable income if Corporation P and Corporation T file a consolidated tax return.
Corporation P owns 93 percent of the outstanding stock of Corporation T. This year, the corporation’s records provide the following information: Corporation P Corporation T Ordinary operating income (loss) $ 500,000 $ (200,000) Capital gain (loss) (8,300) 6,000 Section 1231 gain (loss) (1,000) 5,000 Required: Compute each corporation’s taxable income if each files a separate tax return. Compute consolidated taxable income if Corporation P and Corporation T file a consolidated tax return.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter18: Comparative Forms Of Doing Business
Section: Chapter Questions
Problem 16P
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Question
Corporation P owns 93 percent of the outstanding stock of Corporation T. This year, the corporation’s records provide the following information:
| Corporation P | Corporation T | |
|---|---|---|
| Ordinary operating income (loss) | $ 500,000 | $ (200,000) |
| (8,300) | 6,000 | |
| Section 1231 gain (loss) | (1,000) | 5,000 |
Required:
- Compute each corporation’s taxable income if each files a separate tax return.
- Compute consolidated taxable income if Corporation P and Corporation T file a consolidated tax return.
My solutions: 1. Corporation P: $499,000 and Corporation T: ($189,000), 2. $310,000
I missed this problem on my homework. Could you please explain how to get the correct answer?
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