Originally Posted by SirFlysALot
When I consulted at one of the airlines, they cross charged the department I worked for full fare. The idea was that they could have sold the seat. Am I right in assuming they could write off only the actual expense of providing that seat, not what they could have sold it for? Also losses can be carried forward against income in the future.
You're right. An intracompany charge like the one that you describe would result in income to one department but would be exactly offset by a cost to the other department. Thus, no net income or loss on the company's tax return, which is normally filed at the corporate level.
Corporations generally can carry forward losses for 20 years (and back for 2 years, which you do first). Special rules apply to certain industries, but not airlines.
Bruce