$WEEK 1?Interpreting Tax Research and Tax Representation Guidelines” Please respond to the…

$WEEK 1″Interpreting Tax Research and Tax Representation Guidelines” Please respond to the following:From the e-Activity, evaluate the importance of the principal issue litigated in the case in question using the tax research steps outlined in Appendix A of your text.Compare the American Institute of CPAs’ (AICPA) Statements on Tax Standards (SSTS) and the Treasury Department Circular 230 rules to practice before the Internal Revenue Service (IRS). Suggest which document creates better guidance in the preparation of tax returns and written advice provided to taxpayers.WEEK 2″Transfers to Controlled Corporations and Related Party Losses” Based on the lecture, address the following:Create a scenario where the transfer of property to a controlled corporation under Section 351 of the Internal Revenue Code (IRC) results in the taxation to the transferor. Evaluate the fairness of the taxation of the transaction to the transferor. Provide a tax-planning strategy to prevent taxation of similar transfers.Section 267 of the IRC disallows a deduction on losses realized on the sale of property and a deduction for accrued expenses between a corporation and a controlling shareholder. Generally Accepted Accounting Principles (GAAP) does not include this disallowance provision. Create an argument for allowing a loss on a sales transaction between a controlled corporation and shareholder when the transaction includes an independent appraisal and the loss is similar to losses incurred in arm’s length transactions. Provide an example of allowing such loss to support your argument.WEEK 3″Preferred Stock Bailouts and Personal Holding Company” Please respond to the following:From your analysis of Section 306 in the e-Activity, differentiate between the tax treatment of earnings and profit on the distributing corporation of both a sale of Section 306 stock and redemption of Section 306 stock. Suggest the most important reasons for this differentiation in tax treatment.Per the text, the personal holding company (PHC) tax penalizes taxpayers who enter into tax-motivated transactions designed to shelter passive income of closely held corporations from higher individual tax rates. Suppose you represent a professional athlete who is the majority owner of a corporation. The corporation has several personal service contracts with advertising agencies and endorsements for your client in addition to passive income. Propose a plan in which you eliminate the potential for the PHC tax on the client’s corporation.WEEK 4″Corporate Liquidations, Taxable Acquisition Transactions, and Nontaxable Reorganizations” Please respond to the following:From the e-Activity, evaluate the appropriateness of the techniques used and the common issues pursued by the IRS in corporate liquidations and dissolutions. Create an argument to defend the client if the IRS pursues the assignment of income doctrine or the clear reflection of income doctrine on a cash-basis corporation, as reflected in the Examining Officers Guide (EOG).IRC Section 338 allows a deemed sale election generating immediate taxation to the target corporation and a stepped-up or stepped-down basis to the price paid by the acquiring corporation for the target corporation stock plus liabilities on the deemed sale. Examine at least one (1) benefit of a Section IRC 338 liquidation election for a target corporation. Create a situation which demonstrates a favorable IRC Section 338 liquidation election for a target corporation.WEEK 5Imagine that you were a preparer of a clients return and was unable to gain access to a document needed to support a transaction. You had asked the client numerous times for this item and you were finally presented with an email from the CEO stating that the deduction was allowable. Would you feel comfortable with this documentation? What would be needed in order to bring you to a level of confidence with allowing this item to become part of a return. Support your answer with primary rules and guidance through citations and referencesWEEK 7WEEK 7″S Corporation” Please respond to the following:Per the text and IRC, losses and deductions of an S corporation pass through to the shareholders of the corporation and are limited to the shareholders’ basis in the S corporation. Suggest a plan for a client to increase the deductible pass through loss and deductions over the initial investment from a new wholly owned S corporation.From the e-Activity, differentiate between the treatment of S corporation distributions from corporations having no earnings and profits, and corporations having accumulated earnings and profits. Suggest the most significant reason for the difference in the treatment of distributions. Justify your response.WEEK 9″Fairness of the Federal Estate Tax and Income and Principal in Fiduciary Accounting” Please respond to the following:Per the text, several arguments exist for the repeal of the estate tax. From the e-Activity, defend the most significant argument advanced in the repeal of the estate tax by its opponents. Justify your response.The Uniform Principal and Income Act of 2000 (Uniform Act) allows the trustee to make adjustments between the principal and income accounts as necessary under certain requirements. Examine the major reasoning for allowing such transfers by the trustee and recommend alternatives to the allowance of the adjustments. Justify your response.WEEK 8″Gift Transfers and Gift Tax Planning” Please respond to the following:Per the text and IRC, a gift occurs when the transfer of property is complete and the gift is valued at the date of the transfer. Imagine a scenario in which a client creates an irrevocable trust for his two (2) grandchildren to ensure college education expenses are paid. The trust agreement requires the distribution of the income from the trust directly to the college or university the grandchildren attend for tuition while they are in college and directly to the grandchildren until age twenty-five (25) after completing college. The income from the trust is distributed directly to the grandchildren until they reach age twenty-five (25), if they do not attend college. When the grandchildren celebrate their twenty-fifth (25th) birthday, the income stream distribution reverts to the client’s spouse, and the spouse receives the property upon the death of the client. Examine the gift tax consequences of the transaction based on the use of the irrevocable trust, as compared to direct payments to the grandchildren.Per the text, gift tax-planning strategies can reduce tax for estate tax-planning purposes. Estate tax planning is very important for wealthy clients. Examine one (1) tax-planning strategy that a CPA could use for lifetime giving that would reduce overall estate and gift taxes for a client.WEEK 9″Fairness of the Federal Estate Tax and Income and Principal in Fiduciary Accounting” Please respond to the following:Per the text, several arguments exist for the repeal of the estate tax. From the e-Activity, defend the most significant argument advanced in the repeal of the estate tax by its opponents. Justify your response.The Uniform Principal and Income Act of 2000 (Uniform Act) allows the trustee to make adjustments between the principal and income accounts as necessary under certain requirements. Examine the major reasoning for allowing such transfers by the trustee and recommend alternatives to the allowance of the adjustments. Justify your response.WEEK 10″Criminal Fraud versus Civil Fraud and Taxation of U.S. Businesses Operating Abroad” Please respond to the following:Imagine a situation in which a client under audit by the IRS omitted $100,000 in income. From the e-Activity, examine the major factors relative to the omission by the client that would result in a criminal investigation, rather than a civil fraud proposal by the IRS.Per the text, a U.S. parent company does not include the income of a foreign subsidiary until the income is repatriated as dividends. Defend the creation of foreign subsidiaries as a mechanism to defer income of major U.S. companies. Propose a new tax law that will benefit the U.S. Treasury from the deferral of income from foreign subsidiaries and encourage the repatriation of the previously deferred income.WEEK 11WEEK 11″Learning Experience and Application of Knowledge” Please respond to the following:Assume you have the power to make reforms to the way tax research and planning is currently conducted. Propose the reforms you would make. Justify your response.Speculate on the most significant changes you expect to see in the tax code over the next five (5) years. Explain your reasoning.Assignment 4: Tax-Planning Client Letter on Irrevocable Trusts, Gift Tax, and Estate TaxDue Week 10 and worth 150 pointsSuppose you are a CPA, and your client has requested advice regarding establishing an irrevocable trust for his two (2) grandchildren. He wants the income from the trust paid to the children for 20 years and the principal distributed to the children at the end of 20 years.Use the Internet and Strayer databases to research the rules regarding irrevocable trusts, gift tax, and estate tax. Be sure to use the six (6) step tax research process in Chapter 1 and demonstrated in Appendix A of your textbook as a guide for your written response.Write a one to two (1-2) page letter in which you:Analyze the effect of an irrevocable trust on the gift tax and future estate taxes.Suggest other significant alternatives that the client could use both to reduce estate tax and to maximize potential advantages of the payment of gift taxes on transfers of property.Use the six (6) step tax research process, located in Chapter 1 and demonstrated in Appendix A of the textbook, to record your research for communications to the client.Your assignment must follow these formatting requirements:Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.The specific course learning outcomes associated with this assignment are:Prepare client, internal, and administrative documents that appropriately convey the results of tax research and planning.Create an approach to tax research that results in credible and current resources.Analyze tax issues regarding the gift tax and the estate tax.Analyze tax issues regarding trusts and estates.Use technology and information resources to research issues in organizational tax research and planning.Write clearly and concisely about organizational tax research and planning using proper writing mechanics.Click .strayer.edu/bbcswebdav/institution/ACC/565/1148/Week10/Week%2010%20Assignment%204%20rubric.html”>here to view the grading rubric for this assignment.WEEK 7Assignment 3: Reorganizations and Consolidated Tax ReturnsDue Week 7 and worth 250 pointsSuppose you are a CPA, and you have a corporate client that has been operating for several years. The company is considering expansion through reorganizations. The company currently has two (2) subsidiaries acquired through Type B reorganizations. The client has asked you for tax advice on the benefit of a Type A, C, or D reorganization over a Type B reorganization. Additional facts regarding the issues are reflected below.The company currently files a consolidated income tax return with the two (2) subsidiaries acquired through a Type B reorganization.ABC Corporation, a subsidiary targeted by the client for takeover, has substantial net operating losses.XYZ Corporation and BB Corporation will be acquired as subsidiaries in the next six (6) months.Use the Internet and Strayer databases to research the rules and income tax laws regarding Types A, B, C, and D reorganizations and consolidated tax returns. Be sure to use the six (6) step tax research process in Chapter 1 and demonstrated in Appendix A of your textbook as a guide for your written response.Write a four to six (4-6) page paper in which you:Compare the long-term tax benefits and advantages of each type of reorganization, and recommend the type of reorganization that will be most beneficial to the client.Suggest the type of reorganization the client should use for the ABC Corporation based on your research. Justify the response.Propose a taxable acquisition structure for the client’s planned acquisitions over a nontaxable reorganization. Assess the value of a taxable transaction over a nontaxable reorganization for the client.Examine the value and limitations of including the ABC Corporation if acquired as a wholly owned subsidiary in the consolidated return, and provide a recommendation to your client. Support the recommendation with applicable research.Create a scenario that will allow the client to reduce any disadvantages from filing a consolidated return as a member of a controlled group.Use the six (6) step tax research process, located in Chapter 1 and demonstrated in Appendix A of the textbook, to record your research for communications to the client.Your assignment must follow these formatting requirements:Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.The specific course learning outcomes associated with this assignment are:Prepare client, internal, and administrative documents that appropriately convey the results of tax research and planning.Evaluate tax-planning strategies related to liquidating distributions, acquisitions, and reorganizations.Create an approach to tax research that results in credible and current resources.Research and analyze tax issues regarding consolidated tax returns.Use technology and information resources to research issues in organizational tax research and planning.Write clearly and concisely about organizational tax research and planning using proper writing mechanics.Click .strayer.edu/bbcswebdav/institution/ACC/565/1148/Week7/Week%207%20Assignment%203%20rubric.html”>here to view the grading rubric for this assignment.WEEK 4Assignment 2: Constructive Dividends, Redemptions, and Related Party LossesDue Week 4 and worth 200 pointsSuppose you are a CPA hired to represent a client that is currently under examination by the IRS. The client is the president and 95% shareholder of a building supply sales and warehousing business. He also owns 50% of the stock of a construction company. The client’s son owns the remaining 50% of the stock of the construction company. The client has received a Notice of Proposed Adjustments (NPA) on three (3) significant issues related to the building supply business for the years under examination. The issues identified in the NPA are unreasonable compensation, stock redemptions, and a rental loss. Additional facts regarding the issues are reflected below:Unreasonable compensation: The taxpayer receives a salary of $10 million composed of a $5 million base salary plus 5% of gross receipts not to exceed $5 million. The total gross receipts of the building supply business are $300 million. The NPA by the IRS disallows the salary based on 5% of gross receipts as a constructive dividend.Stock redemptions: During the audit period, the construction company redeemed 50% of the outstanding stock owned by the client and 50% of the stock owned by the client’s son, leaving each with the same ownership percentage of 50%. The IRS treated the redemption as a distribution under Section 301 of the IRC.Rental loss: The rental loss results from a building leased to the construction company owned by the client and his son.Use the Internet and Strayer databases to research the rules and income tax laws regarding unreasonable compensation, stock redemptions treated
as dividends and related party losses. Be sure to use the six (6) step tax research process in Chapter 1 and demonstrated in Appendix A of your textbook as a guide for your written response.Write a three to four (3-4) page paper in which you:Based on your research and the facts stated in the scenario, prepare a recommendation for the client in which you advise either acceptance of the proposed adjustments or further appeal of the issue based on the potential for prevailing on appeal.Create a tax plan for the future redemption of the client’s stock owned in the construction company that will not be taxed according to Section 301 of the IRC.Propose a strategy for the client to receive similar amounts in compensation in the future and avoid the taxation as a constructive dividend.Use the six (6) step tax research process, located in Chapter 1 and demonstrated in Appendix A of the textbook, to record your research for communications to the client.Your assignment must follow these formatting requirements:Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.The specific course learning outcomes associated with this assignment are:Analyze tax issues regarding corporate formations, capital structures, income tax, non-liquidating distributions, or other corporate levies.Prepare client, internal, and administrative documents that appropriately convey the results of tax research and planning.Create an approach to tax research that results in credible and current resources.Use technology and information resources to research issues in organizational tax research and planning.Write clearly and concisely about organizational tax research and planning using proper writing mechanics.Click .strayer.edu/bbcswebdav/institution/ACC/565/1148/Week4/Week%204%20Assignment%202%20rubric.html”>here to view the grading rubric for this assignment.WEEK 2Assignment 1: Client LetterDue Week 2 and worth 150 pointsImagine that you are a Certified Public Accountant (CPA) with a new client who needs an opinion on the most advantageous capital structure of a new corporation. Your client formed the corporation in question to provide technology to the medical profession to facilitate compliance with the Health Insurance Portability and Accountability Act (HIPAA). Your client is very excited because of the ability to secure several significant contracts with sufficient capital.Use the Internet and Strayer databases to research the advantages and disadvantages of debt for capital formation versus equity for capital formation of a corporation. Prepare a formal letter to the client using the six (6) step tax research process in Chapter 1 and demonstrated in Appendix A of your textbook as a guide.Write a one to two (1-2) page letter in which you:Compare the tax advantages of debt versus equity capital formation of the corporation forthe client.Recommend to the client whether he / she should use debt or equity for capital formation of the new corporation, based on your research. Provide a rationale for the response.Use the six (6) step tax research process, located in Chapter 1 and demonstrated in Appendix A of the textbook, to record your research for communications to the client.Your assignment must follow these formatting requirements:Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.The specific course learning outcomes associated with this assignment are:Analyze tax issues regarding corporate formations, capital structures, income tax, non-liquidating distributions, or other corporate levies.Use technology and information resources to research issues in organizational tax research and planning.Write clearly and concisely about organizational tax research and planning using proper writing mechanics.Click .strayer.edu/bbcswebdav/institution/ACC/565/1148/Week2/Week%202%20Assignment%201%20rubric.html”>here to view the grading rubric for this assignment.MIDTERMQuestion 1

When a taxpayer contacts a tax advisor requesting advice as
to the most advantageous way to dispose of a stock, the tax advisor is faced
with

Answer

a restricted-fact situation.

a closed-fact situation.

an open-fact situation.

a recognized-fact situation.

Question 2

During the course of an audit, a CPA discovers an error in a
prior return. According to the Statements on Standards for Tax Services, the
CPA should

Answer

ask the client for permission to disclose the error to the
IRS.

withdraw from the engagement.

inform the IRS of the error, regardless of whether the
client grants permission.

correct the error in the current year’s tax return.

Question 3

A Technical Advice Memorandum is usually

Answer

an internal IRS document describing alternative legislative
proposals.

part of a Tax Court decision.

requested by the taxpayer before entering into a taxable
transaction.

issued by the national office in response to an audit
request.

Question 4

Regulations are

Answer

equal in authority to legislation.

equal in authority to legislation if statutory.

presumed to be valid and to have almost the same weight as
the IRC.

equal in authority to legislation if interpretative.

Question 5

In accordance with the rules that apply to corporate
formation, which one of the following features does not make an issue of
preferred stock “nonqualified”?

Answer

The shareholder can require the corporation to redeem the
stock.

The dividend rate on the stock may not vary with interest
rates, commodity prices, or other similar indices.

The corporation is either required to redeem the stock or is
likely to exercise a right to redeem the stock.

The stock is limited and preferred as to dividends.

Question 6

The transferor’s holding period for any boot property
received in a Sec. 351 stock exchange

Answer

includes the holding period for the boot transferred.

begins on the day after the exchange.

begins on the day of the exchange.

is the same as the holding period of the stock received in
the exchange.

Question 7

Rose and Wayne form a new corporation. Rose contributes cash
for 85% of the stock and Wayne contributes services for 15% of the stock. The
tax effect is

Answer

Rose and Wayne must recognize their realized gains, if any.

Wayne must report the FMV of the stock received as capital
gain.

Rose and Wayne are not required to recognize their realized
gains.

Wayne must report the FMV of the stock received as ordinary
income.

Question 8

Which of the following is an advantage of a sole
proprietorship over other business forms?

Answer

tax-exempt treatment of fringe benefits

the deduction for compensation paid to the owner

low tax rates on dividends

ease of formation

Question 9

Trail Corporation has gross profits on sales of $140,000 and
deductible expenses of $180,000. In addition, Trail has a net capital gain of
$60,000. Trail’s taxable income is

Answer

a $20,000 loss.

a $40,000 loss.

$60,000.

$20,000.

Question 10

Which of the following results in a deferred tax asset?

Answer

Revenue or gains are recognized earlier for book purposes
than for tax purposes.

Operating loss or tax credit carryforwards exist.

Tax basis of an asset is less than its book.

Expenses are deductible earlier for tax purposes than for
book purposes.

Question 11

Dallas Corporation, not a dealer in securities, realizes
taxable income of $60,000 from the operation of its business. Additionally, in
the same year, Dallas realizes a long-term capital loss of $10,000 from the
sale of marketable securities. If the corporation realizes no other capital
gains or losses, what is the proper treatment for the $10,000 long-term capital
loss on the tax return?

Answer

Use $3,000 of the loss to reduce taxable income and carry
$7,000 of the long-term capital loss forward for five years.

Use $6,000 of the loss to reduce taxable income and carry
$4,000 of the long-term capital loss forward for five years.

Use $10,000 of the long-term capital loss to reduce taxable
income.

Carry the $10,000 long-term capital loss back three years as
a short-term capital loss, then forward five years.

Question 12

Which of the following is not a condition that permits a
stock redemption to be treated as a sale?

Answer

It provides funds for payment of income taxes.

It is not essentially equivalent to a dividend.

The redemption is substantially disproportionate.

The redemption completely terminates the shareholder’s
interest.

Question 13

An individual shareholder owns 3,000 shares of Baxter
Corporation common stock with a basis of $10 per share. She receives a
nontaxable 5% stock dividend. The basis per share of the common stock after the
stock dividend is

Answer

$9.00.

$9.50.

$9.52.

$10.00.

Question 14

The gross estate of a decedent contains $2,000,000 cash and
100% of Davis Corporation stock worth $600,000. Funeral and administrative
expenses and state death taxes allowable as estate tax deductions amount to
$400,000. The estate owes no other liabilities. The decedent’s Davis stock can
be

Answer

redeemed to the extent of the death taxes and the estate’s
funeral and administrative costs with sale or exchange treatment.

redeemed with dividend treatment.

redeemed in full with sale or exchange treatment only if the
proceeds are used to pay the death taxes and funeral and administrative costs.

redeemed to the extent of the death taxes and the funeral
and administrative costs with sale or exchange treatment only if the proceeds
are used to pay the death taxes and funeral and administrative costs.

Question 15

Jack Corporation redeems 200 shares of its stock for
$100,000 from Junior, who inherited the stock from his father, Ken. The stock’s
FMV on Ken’s date of death was $90,000. Ken’s basis in the stock was $40,000.
Jack Corporation had an E&P balance of $300,000. If the redemption qualifies
under Sec. 303, Junior will

Answer

recognize a capital gain of $10,000.

recognize a capital gain of $60,000.

recognize $100,000 in dividend income.

recognize dividend income of $50,000 and a capital gain of
$10,000.

Question 16

How does the deduction for U.S. production activities affect
AMTI?

Answer

The computation of qualified production activities is the
same for taxable income and AMTI.

The computation of qualified production activities is based
on qualified production activities income for AMTI.

The computation of qualified production activities is based
on AMTI before the deduction for qualified production activities.

The computation of qualified production activities is based
on the lesser of qualified production activities income or AMTI before the
deduction for qualified production activities.

4 points

Question 17

Which of the following items are tax preference items for
purposes of arriving at alternative minimum taxable income?

Answer

excess intangible drilling costs on oil and gas properties

interest income earned on federal obligations

all depreciation claimed on pre-1987 real property
acquisitions

excess of net long-term capital gains over short-term
capital losses

Question 18

The accumulated earnings tax does not apply to corporations
that

Answer

have more than one class of stock.

are personal holding companies.

are members of a controlled group.

are closely held corporations.

Question 19

When using the Bardahl formula, an increase in accounts
payable (while holding purchases and operating expenses constant) has which of
the following effects on the working capital requirements?

Answer

increase

decrease

no effect

increase, decrease, or no effect, depending on other factors

Question 20

Lake City Corporation owns all of the stock in Columbia
Corporation. Pursuant to a plan of complete liquidation, Columbia distributes
land having a $500,000 FMV and a $200,000 basis to Lake City. Lake City’s basis
in the land will be

Answer

0.

$200,000.

$500,000.

%700,000.

Question 21

The general rule for tax attributes of liquidating
corporations is

Answer

they disappear when the liquidation is complete.

they carry over for five years.

they disappear only for controlled subsidiary corporations.

they carry over for an indefinite period of time.

Question 22

The stock of Cooper Corporation is 70% owned by Carole and
30% owned by Carole’s brother, Chris. During 2013, Chris transferred property
(basis of $100,000 and FMV of $120,000) as a contribution to the capital of
Cooper. During February 2014, Cooper adopted a plan of liquidation and
subsequently made a pro rata distribution of the property back to Carole and
Chris. At the time of the liquidation, the property had an FMV of $80,000. What
amount of loss can be recognized by Cooper on the distribution of property?

Answer

$0

$6,000

$12,000

$20,000

Question 23

American Corporation acquires the noncash assets of Utech
Corporation in exchange for $700,000 of its voting stock plus $50,000 of cash.
Utech Corporation assets are worth $750,000. Utech Corporation does not
distribute the stock and cash but instead holds the stock as an investment.
Utech will use the American cash along with the cash it retained to start a new
business. The transaction can be classified as a

Answer

Type A reorganization.

Type B reorganization.

Type C reorganization.

The transaction does not qualify as a tax-free
reorganization.

Question 24

Jersey Corporation purchased 50% of Target Corporation’s
single class of stock on June 1 of this year. They purchased an additional 40%
on November 20 of this year. The Sec. 338 election must be made on or before

Answer

June 30 of this year.

November 30 of this year.

August 15 of next year.

June 30 of next year.

Question 25

Acquiring Corporation acquires all of the stock of Target
Corporation in a Type B (stock-for-stock) reorganization. Both corporations
have always filed separate tax returns. Which one of the following statements
regarding the acquisition is correct?

Answer

Acquiring and Target Corporations can elect to file a
consolidated tax return.

Acquiring and Target Corporations must file a consolidated
tax return.

Acquiring Corporation assumes all of the tax attributes of
Target Corporation.

Acquiring Corporation must step up or step down the basis of
the Target Corporation’s assets to their FMV on the acquisition date?FINAL EXAMQuestion 16 out of 6 pointsCorrectWhich of the following events is an intercompany transaction that requires the deferral and later recognition of income?Question 26 out of 6 pointsCorrectJackson and Tanker Corporations are members of an affiliated group. The two corporations have been affiliated since they were formed last year. Both corporations have always used a calendar year as their tax year. Tanker, the subsidiary, has a separate return year NOL of $14,000 from last year. Jackson Corporation has a separate return year NOL of $16,000 from last year. Commencing this year, the two corporations filed a consolidated tax return. The NOLs can be carried over.Questio