Peter Incorporated, a Kentucky corporation, owns 100 percent of Suvi Incorporated, a Mississippi corporation. Peter and Suvi file a consolidated federal tax return. Peter has income tax nexus in Kentucky and South Carolina; Suvi has income tax nexus in Mississippi and South Carolina. Kentucky, Mississippi, and South Carolina are separate-return states. (Hint: Use South Carolina Form SC 1120 and the related instructions.)

1. In which states must Peter file tax returns? Kentuckey and Mississippi
2. In which states must Suvi file tax returns? Mississippi and South Carolina
3. In which state can they file a consolidated return? South Carolina

QUESTION:

Using the information above from the Research Assignment problem #4 in McGraw Hill Connect, write a tax reserach memorandum for your tax client citing the IRC section and explaining to your client what the tax treatment is of each scenario. Cite references.

Format of memo:

To:

Date:

By:

RE:

Facts

Question(s)

Conclusion

Analysis (this is where you will cite the code - for example IRC Sec. 162(a)