LO.5 Parent and Sub Corporations file their Federal income tax returns on a consolidated basis. Parent, a calendar year taxpayer, owns all of the outstanding stock of Sub.

The consolidation election was effective in January 2011. Both companies are profitable, and tax projections for the future appear below. How much must be remitted to the IRS for estimated payments in each year?

Tax Year Parent’s Federal Tax Estimate Sub’s Federal Tax Estimate 2011 $500,000 $150,000 2012 500,000 170,000 2013 600,000 200,000 2014 750,000 300,000