Question

Determine consolidated taxable income for the calendar year Yeti Group, which elected consolidated status immediately upon...

Determine consolidated taxable income for the calendar year Yeti Group, which elected consolidated status immediately upon the creation of the two member corporations on January 1 of year 1. All recognized income is ordinary in nature, and no intercompany transactions were completed during the indicated years.

Tax Year Yeti Corporation Snowman Corporation 1

1 $450,000 $70,000

2 450,000 (310,000)

3 450,000 (600,000)

4 450,000 75,000

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Answer #1

Consolidated Taxaxble income for the calendar year of Yeti Group:

Consolidated Taxable income is the combination for both the parent and subsidiary company's taxable income:

Consolidated Taxable income for year 1 = $450,000 + $70,000 = $520,000

Consolidated Taxable Income for the year 2 = $450,000 + (-$310,000) = $140,000

Consolidated Taxable income for the year 3 = $ 450,000 + (-$600,000) = $-150,000

Consolidated Taxable income for the year 4 = $ 450,000 + $75,000 = $525,000

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