Question

Clifton Corporation acquired all of the outstanding Gillion stock on January 1, 2014, for $2,400,000. The parties immediately elected to file consolidated Federal income tax returns.
Gillion reported a 2014 taxable loss of $250,000, but it generated $400,000 taxable income in 2015 and $180,000 in 2016. Gillion paid a $100,000 dividend to Clifton in 2015 and $300,000 in 2016. Compute Clifton’s stock basis in Gillion on the last day of each of the following tax years.
a. 2014.
b. 2015.
c. 2016.


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  • CreatedSeptember 09, 2015
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