P Corporation owns all of S Corporation’s stock. P and S have filed consolidated tax returns for several years. Determine whether the affiliated group terminates in each of the following circumstances. Assume that all corporations use the calendar year as their tax year.
a. On February 1 of the current year, P purchases all of T Corporation’s stock.
b. On March 1 of the current year, P purchases all of T Corporation’s stock. On October 1 of the current year, P sells all of S’s stock.
c. On April 1 of the current year, P sells all of S’s stock. On September 1 of the current year, P purchases all of T Corporation’s stock.
d. On May 1 of the current year, P sells all of S’s stock. On January 1 of the next year, P purchases all of T Corporation’s stock.
e. On June 1, R Corporation purchases all of P’s stock. R had no subsidiaries prior to June 1.
f. On July 1, R Corporation purchases all of P’s stock. On July 1, R has several wholly owned subsidiaries with which it has filed consolidated tax returns for several years.