Corporation owns all the stock of S1 and S2 Corporations. The corporations have filed consolidated tax returns since their creation in Year 1. At the close of business on July 10 of Year 3, P sells all of its 52 stock. The group reports the following results:

In what year(s) can the corporations deduct the Year 1 consolidated NOL? Assume that Year 1 is 2018 or a later year.

Transcribed Image Text:

Тахаble Income Group Member Year 1 Year 2 $(18,000) (24,000) (28,000) $32,000 (8,000) 30,000° S1 S2 Consolidated taxable income (before NOL deduction) *$14,000 is attributable to January 1 through July 10 of Year 2, and $16,000 is attributable to July 11 through December $(70,000) $38,000 31 of Year 2. b$32,000 + ($8,000) + $14,000