Question

42. Halperin Corporation owns stock of Leon Corporation. For Halperin and Leon to qualify for the filing of consolidated returms, at least what percentage of Halperin's total voting power and total value of stock must be directly owned by Leon? A) Total voting power 51% Total Value of stock S1% B) Total voting Total Value of power 51% stock 80% C) Total voting Total Value of stock power 80% 80% D) Total voting Total Value of stock 51% power S0% 43. Which of the following corporations is entitled to join in a consolidated tax return without making a special election? A) corporations exempt from tax under Sec. 501 B) real estate investment trusts C) foreign corporations D) closely held corporations 44. Prisha and Ryia Corporations have filed consolidated tax returns for several At the close of business on September 30, Prisha Corporation sells all of the Riya Corporation stock. What portion of Prisha's and Riya's income for the current year will be included in the consolidated retum, assuming its income is earned evenly throughout the year and all months have 30 days? A) calendar years. Riya 100% Prisha 100% B) Prisha 75% Riya 100% C) Prisha 100% Riya 75% D) none of the above

Answer 1

42 A, a minimum of 51% of stock holding and 51% of voting rights is needed for consolidation of financial statement.

43, D, Closely held corporations, all others are excluded from the internal revenue code.

44, C, For Prisha corporations 100% as the profit is reported for the 12 months & Riya corporation 75% as the stock sales occurred on 31 Sep.