[vt2009]

In terms of a consolidated return, can someone give insight into:

(1) how capital losses of one corporate offset capital gains in another corporation and

(2) how operating losses of one corporation offset operating profits of another corporation?

I understand the concept but I can’t find anything in terms of how to allocate if you have more than two corporations consolidating returns. (i.e. two corporations have gains/profit and one has loss — how to determine which gets to benefit)

Thanks!!

[san4596]

Parent company would be net of all numbers, but I am a little confused by “who gets the benefit?”

CPA EXAM: DONE!!!!
Ethics Course: Passed
Application Mailed: 3/16/15
Professional Conduct Exam: 97
Certification Date: 4/2/15!!!

[san4596]

Parent company would be net of all numbers, but I am a little confused by “who gets the benefit?”

CPA EXAM: DONE!!!!
Ethics Course: Passed
Application Mailed: 3/16/15
Professional Conduct Exam: 97
Certification Date: 4/2/15!!!

[vt2009]

@san4596 Ah ok, I think it might have just clicked. I read an advantage of filing a consolidated return is: capital losses of one corporation offset capital gains of another corporation; and operating losses of one offset operation profits of another.

I was thinking if there were for example two subs (A and B) and one parent; where sub A has a loss, and sub B and the parent have gains. In terms of how the loss from sub A is allocated to offset the gains of sub B and parent.

Based on how I'm reading your response it would only be the parent then that offsets their gain by sub A's loss?

[vt2009]

@san4596 Ah ok, I think it might have just clicked. I read an advantage of filing a consolidated return is: capital losses of one corporation offset capital gains of another corporation; and operating losses of one offset operation profits of another.

I was thinking if there were for example two subs (A and B) and one parent; where sub A has a loss, and sub B and the parent have gains. In terms of how the loss from sub A is allocated to offset the gains of sub B and parent.

Based on how I'm reading your response it would only be the parent then that offsets their gain by sub A's loss?

[Author]

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