Question: A and B are an affiliated group that files a consolidated return. At the start of the current year, B sells a delivery truck to
A and B are an affiliated group that files a consolidated return. At the start of the current year, B sells a delivery truck to A for $50,000. B's adjusted basis in the truck was also $50,000 on the sale date. A still owns the truck at year end and claims annual tax depreciation of $30,000 based on B's carry over basis depreciation schedule. Also, A sells inventory to B at a loss of $24,000. Before year-end, B resells the inventory to an unrelated third party for a gain of $9,000. Before making any adjustments, a and B have separate taxable income of $300,000 and 700,000 respectively.
What is their group's consolidated taxable income?
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