Comet operates solely within the United States. It owns two subsidiaries conducting business in the United States and several foreign countries. Both subsidiaries are U.S. corporations. This year, the three corporations report the following: Foreign Source Income U.S. Source Income Foreign Income Tax Paid $ 780,000 0 235,000 $ 388,000 592,500 1,270,000 Comet O Sub 1 $ 3,840,000 Sub 2 4,400,000 Required: 1. If Comet and its two subsidiaries file a consolidated U.S. tax return, compute consolidated income tax. 2. What is the aggregate tax of the group if the three corporations file separate U.S. tax returns?
Comet operates solely within the United States. It owns two subsidiaries conducting business in the United States and several foreign countries. Both subsidiaries are U.S. corporations. This year, the three corporations report the following: Foreign Source Income U.S. Source Income Foreign Income Tax Paid $ 780,000 0 235,000 $ 388,000 592,500 1,270,000 Comet O Sub 1 $ 3,840,000 Sub 2 4,400,000 Required: 1. If Comet and its two subsidiaries file a consolidated U.S. tax return, compute consolidated income tax. 2. What is the aggregate tax of the group if the three corporations file separate U.S. tax returns?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter17: Business Tax Credits And The Alternative Minimum Tax
Section: Chapter Questions
Problem 17P
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