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Corporations P, S, and C are members of a parent-subsidiary
controlled group filing a consolidated tax return. Corporations
A and B are members of a brother-sister controlled group that
cannot file a consolidated tax return. Design a strategy geared
toward creating an affiliated group which makes Corporations
A, B, P, S, and C all eligible to file a consolidated tax return.
Assess the adequacy of the schedule M-3 Part 1 in creating
transparency between the consolidated financial statements and
the consolidated tax returns of the corporations discussed in the
first part of this discussion. Suggest at least two (2)
modifications to the M-3 that you can use to identify possible
issues the IRS would most likely examine on a consolidated tax
return.

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  • 1. Corporations P, S, and C are members of a parent-subsidiary controlled group filing a consolidated tax return. Corporations A and B are members of a brother-sister controlled group that cannot file a consolidated tax return. Design a strategy geared toward creating an affiliated group which makes Corporations A, B, P, S, and C all eligible to file a consolidated tax return. Assess the adequacy of the schedule M-3 Part 1 in creating transparency between the consolidated financial statements and the consolidated tax returns of the corporations discussed in the first part of this discussion. Suggest at least two (2) modifications to the M-3 that you can use to identify possible issues the IRS would most likely examine on a consolidated tax return.