46. Which of the following events is an intercompany transaction that requires the deferral and later recognition of income?

A) sale of inventory from a subsidiary corporation to its parent corporation

B) accrual of rentals on a lease of real property owned by one group member that is used by another group member; both group members use the accrual method of accounting

C) cash dividend payment from a subsidiary corporation to its parent corporation

D) None of the above transactions require the deferral and later recognition of income.

47. Santana Corporation and Andrei Corporation file consolidated returns. In January 2017, Santana sold Andrei Land with a basis of $100,000 for its fair value of $125,000. Andrei sold the property to an unrelated party in April 2018 for $175,000. What amount of gain should be reported for these transactions in the consolidated returns for 2017 and 2018?

A)

2017	2018
$25,000	$50,000

B)

2017	2018
$0	$25,000

C)

2017	2018
$0	$75,000

D)

2017	2018
$25,000	$75,000

48. Bonnie and Clyde Corporations have filed consolidated returns for several calendar years. Bonnie acquires land for $75,000 on January 1 of last year. On August 1 of this year, Bonnie sells the land to Clyde for $100,000. The basis and holding period for the land acquired by Clyde are:

A)

Basis	Holding Period Begins On
$75,000	January 2 of last year

B)

Basis	Holding Period Begins On
$100,000	January 2 of last year

C)

Basis	Holding Period Begins On
$100,000	August 2 of this year

D) none of the above

49. Mohammed Corporation and Ali Corporation, an affiliated group, reports the following results for the current year:

Corporation	Ordinary Income	STCG/STCL	LTCG/LTCL
Mohammed Ali	$15,000 20,000	$8,000 (9,000)	($ 6,000) 12,000

What is the affiliated group's consolidated regular tax liability?

A) $4,000

B) $6,000

C) $6,500

D) $7,000

50. Parent and Subsidiary Corporations form an affiliated group. Last year, the initial year of operation, Parent and Subsidiary filed separate returns. This year the group files a consolidated return.

Taxable Income

	Last	Current
Parent	($15,000)	$25,000
Subsidiary	12,000	(27,000)

How much of the Subsidiary loss can be carried back to last year?

A) $0

B) $1,000

C) $2,000

D) none of the above