Financial accounting and the tax treatment

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Reference no: EM13746492

Your client, Big Corporation, and its wholly owned subsidiary, LittleCo, file a consolidated return for Federal income tax purposes. Indicate both the financial accounting and the tax treatment of the following transactions.

a. LittleCo pays a $1 million dividend to Big.

b. LittleCo sells investment land to Big. LittleCo's basis in the land is $200,000. The sale price is $600,000.

c. Six months after purchasing the land from LittleCo, Big sells the investment land to Phillips, an unrelated party, for $750,000.

Reference no: EM13746492

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