5 Advantages of Filing a Consolidated Tax Return (U.S. Tax)

A group of corporations may elect to file a consolidated tax return and be treated as a single taxpaying entity. Here are 5 advantages of filing a consolidated tax return:

#1: losses of one corporation in the group can offset taxable income of another corporation in the group.
#2: dividends between companies in the group are not taxed.
#3: income from certain intercompany transactions is not taxed until a sale is made to an unrelated third party (thus deferring tax liability).
#4: the use of consolidated amounts may make it easier to bypass limitations on certain deductions.
#5: the parent's tax basis in a subsidiary's stock increases when the subsidiary generates income (a higher basis in the subsidiary's stock means the parent will recognize less gain if it sells the subsidiary's stock).—
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[fboglev]

Solid and concise presentation delivery!