Subsidiary gross income

Assignment Help Accounting Basics
Reference no: EM13135817

Parent Corporation for ten years has owned all of the stock of Subsidiary Corporation, which manufactures widgets. Parent's basis in Subsidiary's stock is $500,000. Subsidiary Corporation is insolvent and has no assets to redeem any of the stock that Parent Corporation owns when it liquidates. Nearly all of Subsidiary's gross income during the past five years has come from nonpassive activities. Parent can recognize:

a. a $500,000 short-term capital loss.

b. a $500,000 long-term capital loss.

c. a $500,000 ordinary loss.

d. a $500,000 bad debt deduction.

Reference no: EM13135817

Questions Cloud

Public policy initiatives : I need help in putting together information that I can use and I also need guidance for the structure on two local, state, or national public policy initiatives either recently adopted or in current development.
E climate and disease factors in producing economic social : To what extent were climate and disease key factors inproducing economic and social change in Medieval Europe? Do natural conditions have a similar impact in the world today? Have we'conquered' nature? 500 words
What is the molar concentration of br ion : What is the molar concentration of Br^- ions in a 0.235 M aqueous solution of FeBr3, assuming complete dissociation?
Carlton ltd has prepared draft : The financial accountant of Carlton Ltd has prepared draft financial statements for the year ended 30 June 2014 but is unsure about the tax calculations.
Subsidiary gross income : Subsidiary Corporation is insolvent and has no assets to redeem any of the stock that Parent Corporation owns when it liquidates. Nearly all of Subsidiary's gross income during the past five years has come from nonpassive activities. Parent can re..
Evaluate and comment on both the immediate : Indicate increase (+), decrease (-), or no effect (NE). Make sure your answer is CLEAR in terms of all items below (1-13) and that you make an entry for EACH column (Net Income, Cash From Operations, and Cash Position).
Healthcare affairs for affordable care act : Based on the decision of individual states to fund Medicaid to different levels, how does this policy national wide health care? Should this be centralized rather than positioned at the state level for decisions as to funding levels?
Given this stock ownership will whitemop corporation : Given this stock ownership, will Whitemop Corporation be treated as a personal holding company (i.e., do 5 or fewer persons own more than 50% of the stock)?
Government and citizen reciprocity : Briefly, identify and explain 3 ways that government in the United States affects the lives of citizens. Identify and explain three specific things that citizens can do to maintain or improve the positive effects of government in the United States?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Which one of the following will increase the operating cycle

Which one of the following will increase the operating cycle?

  What governing bodies set accounting standards

Financial statements are prepared in accordance with what? What governing bodies set accounting standards? Why do you think financial statements are required to be prepared using the same standards?

  Report in a consolidated balance sheet

using the entity theory, at what amount would land be reported in a consolidated balance sheet prepared immediately after the combination?

  Accounting for income taxes

In AT&Ts 2000 annual report, the company reported long-term deferred tax assets of $4,523,000,000 and current deferred tax assets of $1,791,000,000. What might contribute to AT&Ts need to record a valuation allowance?

  Continuous cycle-managerial accounting

Define planning, organizing, and controlling and then explain why the phases of planning, organizing, and controlling are referred to as a continuous cycle?

  Opportunity to buy a machine

The Whitton Company uses a discount rate of 16%. The company has an opportunity to buy a machine now for $18,000 that will yield cash inflows of $10,000 per year for each of the next three years.

  Capitalized lease liability

The rounded present value of an ordinary annuity for nine years at 9% is 6.0. What amount should N report as capitalized lease liability at December 31, 2009?

  Shut down condition for a competitive firm-norm fish

orm Fish makes cheap fishing rods and operates in a competitive market.  The company has a fixed cost of $20,000 per period.  In addition the firm incurs production or variable costs depending on its output as follows:

  Analyzing and journalizing payroll transactions

Kelsey Gunn is the only employee of Arsenault Company. His pay rate is $23.00 per hour with an overtime rate of 1 and 1/2 times for hours over 40 in a work week.

  Regulations ultimately issued for that statute

When Congress passes a statute with language such as, "The Secretary shall prescribe such regulations as he may deem necessary," the regulations ultimately issued for that statute are:

  Which option would you prefer and why

Big Al's Pizza Managerial Accounting Part Seven: Using net present value (NPV) analysis compare the present value of the lease payments with the cost of buying the equipment to replace the leased equipment as explained in Part Seven. Assume a 10% ..

  Compute the failure to pay and failure to file penalties

Compute the failure to pay and failure to file penalties for John, who filed his 2010 income tax return on October 20, 2011, paying the $30000 amount due at that time.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd