LargeCo files on a consolidated basis with LittleCo. The subsidiary was acquired for $500,000 on

January 1, Year 1, and it paid a $20,000 dividend to LargeCo at the end of both Year 2 AND Year 3.

Given the following information about the subsidiarys operating results, derive the requested amounts as of December 31 of each year. The group files using a calendar year.

	LittleCos	LargeCos Investment in LittleCo		LargeCos
Year	Operating Gain/(Loss)	Stock Basis	Excess Loss Account	Operating Gain/ (Loss)
1	($100,000)	A	X	$400,000
2	($300,000)	B	Y	$400,000
3	$600,000	C	Z	$400,000

A:

B:

C:

X:

Y:

Z:

What is the consolidated taxable income for:

Year 1:

Year 2:

Year 3: