P Corporation purchases all of S Corporation's stock in the current year. Both corporations are includible corporations. S is P's only subsidiary. Explain their federal income tax return filing alternatives.

(Select all that apply.)

A.

P and S comprise both an affiliated group of corporations and a controlled group of corporations. As an affiliated group, P and S can elect to file a consolidated tax return, but they are not required to do so.

B.

P and S comprise a controlled group of corporations. As a controlled group, P and S are required to file separate tax returns.

C.

P and S may elect to file a consolidated tax return. If so, then P-S group will compute its consolidated tax liability under the consolidated tax return rules, which generally treat the group as if it were one corporation.

D.

P and S may each elect to file a separate tax return. As a controlled group, they are allowed to benefit only once from certain items, such as the $250,000 accumulated earnings credit and the maximum amount of depreciable property that can be immediately expensed under Sec. 179.

P Corporation purchases all of S Corporation's stock in the current year. Both corporations are includible corporations. Sis P's only subsidiary. Explain their federal income tax return filing alternatives. (Select all that apply) DAP and S comprise both an affiliated group of corporations and a controlled group of corporations. As an affiliated group, P and Scan elect to file a consolidated tax return, but they are not required to do so. B. P and Scomprise a controlled group of corporations. As a controlled group, P and S are required to file separate tax returns C. P and S may elect to file a consolidated tax return. If so, then P-S group will compute its consolidated tax liability under the consolidated tax return rules, which generally treat the group as if it were one corporation OD. P and S may each elect to file a separate tax return. As a controlled group, they are allowed to benefit only once from certain items, such as the $250,000 accumulated earnings credit and the maximum amount of depreciable property that can be immediately expensed under Sec. 179. P Corporation purchases all of S Corporation's stock in the current year. Both corporations are includible corporations. Sis P's only subsidiary. Explain their federal income tax return filing alternatives. (Select all that apply) DAP and S comprise both an affiliated group of corporations and a controlled group of corporations. As an affiliated group, P and Scan elect to file a consolidated tax return, but they are not required to do so. B. P and Scomprise a controlled group of corporations. As a controlled group, P and S are required to file separate tax returns C. P and S may elect to file a consolidated tax return. If so, then P-S group will compute its consolidated tax liability under the consolidated tax return rules, which generally treat the group as if it were one corporation OD. P and S may each elect to file a separate tax return. As a controlled group, they are allowed to benefit only once from certain items, such as the $250,000 accumulated earnings credit and the maximum amount of depreciable property that can be immediately expensed under Sec. 179