Miami and Tampa Corporations comprise a parent-subsidiary controlled group. The corporations also comprise an affiliated group that has filed separate tax returns prior to the current year. In each case for the current year, determine each corporation’s regular tax liability if they file separate tax returns, and determine the group’s consolidated regular tax liability if they elect to file a consolidated tax return. Ignore the U.S. production activities deduction. Assume that, if they file separate tax returns, Miami and Tampa do not elect a special apportionment plan for allocating the corporate tax rates. Assume also that, if the group elects to file a consolidated tax return, its consolidated taxable income equals the sum of Miami’s and Tampa’s separate taxable incomes.
a. Miami’s separate taxable income is $50,000, and Tampa’s separate taxable income is $30,000.
b. Miami’s separate taxable income is $70,000, and Tampa’s separate taxable income is $(15,000), i.e., a loss.
c. Miami’s separate taxable income is $45,000, and Tampa’s separate taxable income is $40,000.