On July 1, 2016, P Corporation acquired all the stock of S Corporation for $42,000 and included S Corporation in its US Consolidated tax return. On the acquisition date, S has accumulated earnings and profits of $14,000. During the period July1-December 31, 2016, S Corporation incurred a taxable loss of $9,000. S Corporation had earnings of $18,000 in 2017, and made a distribution of $5,000 to P Corporation on October 1.

A) Determine P’s basis in S stock as of December 31, 2017.

B) What are the requirements for S to be included in P Corporation's US consolidated tax return?

Answer rating: 100% (QA)

A Ps basis in S stock as of December 31 2017 Stock acquired 42000 inclusive of accumulated earnings ... View the full answer