P and S1 Corporations have filed consolidated tax returns for several years. S1 acquires all of S2 Corporation's stock at the close of business on June 15 of the current year. Which of the following current year transactions are intercompany transactions? a. S1 sells machinery (Sec. 1245 property) to S2 on September 1. b. Psells inventory to S1 throughout the year. c. S2 performs services for S1 throughout the year. d. Psells inventory to the S1-S2 Partnership on July 23. S1 and 2 are equal partners in the partnership O A. A and B are considered intercompany transactions and they must follow the intercompany transaction rules. However, is not since services are not intercompany transactions and d is not since partnerships are not part of intercompany transactions OB. A, B, C, and D are all considered intercompany transactions for P, S1 and 52 and therefore must follow the intercompany transaction rules when consolidating taxable income. O C. None of the situations are considered intercompany transactions, and therefore do not need to follow the intercompany transaction rules when consolidating taxable income. OD. A and B are considered intercompany transactions and they must follow the intercompany transaction rules. However, c must only follow the intercompany transaction rules from June 16 through December 31, and d does not need to follow the intercompany transaction rules since it is an unincorporated entity P and S1 Corporations have filed consolidated tax returns for several years. S1 acquires all of S2 Corporation's stock at the close of business on June 15 of the current year. Which of the following current year transactions are intercompany transactions? a. S1 sells machinery (Sec. 1245 property) to S2 on September 1. b. Psells inventory to S1 throughout the year. c. S2 performs services for S1 throughout the year. d. Psells inventory to the S1-S2 Partnership on July 23. S1 and 2 are equal partners in the partnership O A. A and B are considered intercompany transactions and they must follow the intercompany transaction rules. However, is not since services are not intercompany transactions and d is not since partnerships are not part of intercompany transactions OB. A, B, C, and D are all considered intercompany transactions for P, S1 and 52 and therefore must follow the intercompany transaction rules when consolidating taxable income. O C. None of the situations are considered intercompany transactions, and therefore do not need to follow the intercompany transaction rules when consolidating taxable income. OD. A and B are considered intercompany transactions and they must follow the intercompany transaction rules. However, c must only follow the intercompany transaction rules from June 16 through December 31, and d does not need to follow the intercompany transaction rules since it is an unincorporated entity
