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Comet operates solely within the United States. It owns two subsidiaries conducting business in the United States and several foreign countries. Both subsidiaries are
Comet operates solely within the United States. It owns two subsidiaries conducting business in the United States and several foreign countries. Both subsidiaries are U.S. corporations. This year, the three corporations report the following: U.S. Source Foreign Income 0 Foreign Source Income Income Tax Paid Comet Sub 1 Sub 2 0 $ 600,000 $ 3,500,000 4,700,000 150,000 410,000 $ 350,000 1,175,000 Required: a. If Comet and its two subsidiaries file a consolidated U.S. tax return, compute consolidated income tax. b. What is the aggregate tax of the group if the three corporations file separate U.S. tax returns? Complete this question by entering your answers in the tabs below. Required A Required B If Comet and its two subsidiaries file a consolidated U.S. tax return, compute consolidated income tax. Note: Do not round any intermediate calculations. Consolidated income tax < Required A Required B
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