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Corporation P owns 93 percent of the outstanding stock of Corporation T. This year, the corporations records provide the following information: Corporation P Corporation T

Corporation P owns 93 percent of the outstanding stock of Corporation T. This year, the corporations records provide the following information:

Corporation P Corporation T
Ordinary operating income (loss) $ 540,000 $ (220,000 )
Capital gain (loss) (8,700 ) 6,400
Section 1231 gain (loss) (1,400 ) 5,800

Required:

  1. Compute each corporations taxable income if each files a separate tax return.
  2. Compute consolidated taxable income if Corporation P and Corporation T file a consolidated tax return.

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