ParentCo owns all of the stock of DaughterCo, and the group files its Federal income tax returns on a consolidated basis. Both taxpayers are subject to the AMT this year due to active operations in oil and gas development. No intercompany transactions were incurred this year. If the affiliates filed separate returns, they would report the following amounts.

a. What amount of the $40,000 AMT exemption can be taken if the election to consolidate is made?

b.What amount of the $40,000 AMT exemption can be taken by either ParentCo or DaughterCo if the affiliates file separate returns?

c. What is the ACE adjustment allowed for each affiliate if separate returns are filed?

ParentCo: $___________

DaughterCo: $__________

d. What is the ACE adjustment if a consolidated return is filed?