Answered: The Parent consolidated group reports…

The Parent consolidated group reports the following results for the 2021 tax year. Entity Income or Loss Parent $78,600 Sub1 (7,860) Sub2 31,440 Sub3 15,720

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter8: Consolidated Tax Returns

Section: Chapter Questions

Problem 24CE

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Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

Only typed solution

The Parent consolidated group reports the following results for the 2021 tax year.
Entity
Income or Loss
$78,600
Parent
Sub1
(7,860)
Sub2
31,440
Sub3
15,720
Do not round any division in your computations. If required, round your answers to
nearest whole dollar. If an amount is zero, enter "0".
a. What is the group's consolidated taxable income and consolidated tax liability?
If the relative taxable income method, the consolidated taxable income is $
the total consolidated tax liability is $
b. If the Parent group has consented to the relative taxable income method, how will the
consolidated tax liability be allocated among the Parent and Subsidiaries 1, 2, and 3?
Entity
Income or Loss
Parent
$
Sub1
$
Sub2
$
Sub3
$
and

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