LO.8 Parent and Child Corporations have filed on a consolidated basis since the mid-

1970s. Junior Corporation was formed at the beginning of this year through an asset split-off from Parent. Operations this year resulted in a $2 million operating loss, onefourth of which can be traced to Junior.

Should Junior join the consolidated group this year? Will the group be able to carry back and claim a refund for the $500,000 NOL that is attributable to Junior? Explain.