1. ParentCo and SubCo report the following items of income and deduction for the current year.

	ParentCo's	SubCo's Taxable
Item	Taxable Income	Income
Income (loss) from operations	$100,000	($10,000)
1231 loss	(5,000)
Capital gain		15,000
Charitable contribution	12,000

Compute ParentCo and SubCo's consolidated taxable income or loss.

a.$90,000

b.$81,000

c.$88,000

d.$90,500

2. A Federal consolidated group reported the following taxable income amounts. Parent owns all of the stock of both Junior and Minor. Determine the net operating loss (NOL) that is apportioned to Parent.

Parent	($400,000)
Junior	($600,000)
Minor	$100,000

a.$360,000.

b.$400,000.

c.$900,000. All NOLs of a consolidated group are apportioned to the parent.

d.$500,000.

3. ParentCo and SubCo have filed consolidated returns since both entities were incorporated in year 1. 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.

	ParentCo's	SubCo's Taxable	Consolidated
Year	Taxable Income	Income	Taxable Income
Year 1	$100,000	$ 35,000	$135,000
Year 2	$100,000	($ 20,000)	$ 80,000
Year 3	$100,000	($109,000)	?
Year 4	$100,000	$190,000	?

The year 3 consolidated loss:

a.Is carried back to year 1 and produces a tax refund.

b.Is carried forward to year 4.

c.Offsets ParentCo's year 1 income.

d.Can be used only to offset SubCo's future income.