P and S Corporations have filed consolidated tax returns for ten years. P and S use the accrual method of accounting, and they use the calendar year as their tax year. P and S report separate return taxable income (before any consolidation adjustments and eliminations, the NOL deduction, the charitable contributions deduction, the charitable contributions deduction, and the dividends received deduction) for the current year of $200,000 and $250,000 respectively. These amounts include the following current year transactions and events.

• P sells land to a third party for $80,000. P purchased the land from S two years ago for $70,000. S had purchased the land five years ago for $48,000.

• P’s separate taxable income includes a $12,000 dividend S paid to P.

• P sold inventory to S in the previous year for which the deferred profit at the beginning of the current year is $5,000. S sells this inventory outside the consolidated group in the current year. P sells additional inventory to S in the current year, realizing a $100,000 profit. The intercompany profit on this unsold inventory is $8,000.

• The P-S group has a $20,000 consolidated NOL carryover available from the previous year. The NOL is wholly attributable to S.

• P receives $10,000 of dividends from the corporation in which it owns less than 1% of the stock.

• P and S contribute cash to charities of $17,000 and $11,000, respectively.

• P lends S $150,000 early in the current year. S repays the loan later in the year. In addition, S pays P $6,000 interest at the time of repayment.

• S earns $1,600 of tax-exempt interest income, which is not included in S’s $250,000 separate return taxable income.

• P and S have no qualified production activities income.

Determine the P-S group’s consolidated taxable income and consolidated tax liability for the current year. What is P’s basis for the S stock at the end of the current year? Assume that P’s basis for the S stock was $1.4 million at the beginning of the current year.

Answer all questions below and show work thanks

1. The total amount of inter company profit and loss transactions between P&S eliminated in the preparation of consolidated taxable income.

2. P&S Group’s consolidated taxable income.

3. P&S Group’s consolidated tax liability.

4. P’s basis in S’s stock at the end of the current year.

5. P&S Group’s consolidated NOL carryover at the end of the current year, if any.