LO.6 WhaleCo acquired all of the common stock of MinnowCo early in year 1 for

$900,000, and MinnowCo immediately elected to join WhaleCo’s consolidated Federal income tax return. As part of the takeover, WhaleCo also acquired $300,000 of MinnowCo bonds. The results of MinnowCo for the first few years of the group operations were reported as follows.

Tax Year Operating Gain/Loss Stock Basis 1 $ 100,000 _________ 2 (800,000) _________ 3 (600,000) _________ Determine WhaleCo’s basis in its MinnowCo common stock as of the end of each tax year.