Are Form 1120 Schedule M 3 Acquisition 2019-2024

Controlled and affiliated groups. We're getting back to more media material here. We had said in the first entity section that sometimes you have more than one organization, and that can be good for you. You can have the best of a corporation and the best of an S corporation, where you might have multiple C corporations to divide out liabilities so you don't lose it all if you're in any dangerous business or could be sued. Congruent roll groups are related groups of corporations that must file together as one corporation. For example, the first $50,000 of net income is taxed at a 15% corporate rate, and then the tax rate goes up from there. Why wouldn't I, if I thought I was going to make a hundred thousand this year, break the company up into two smaller corporations, each taxed at a lower 15% rate? And if I had a company like Exxon, think of how many companies I would have broken it up into. That is, I would break it up into so many companies, I would never pay more than fifteen percent, and I would avoid the thirty-five percent tax rate. Congress said, "No, you really won't do that," so Congress enacted control group laws that require consolidation over related corporate groups. Let's go back and define a controlled group. A controlled group is a group of corporations that is controlled or owned by the same group of taxpayers. Control groups may be parent-subsidiary groups. A parent-subsidiary group is where one corporation owns at least 80% of the voting power or, and the "or" is important, 80% of the stock value of another corporation on the last day of the year. Again, this is medium material, as kind of a memory trick. Remember the "O" in controlled...