Key and Glass Corporations Were Organized Last Year

question 89

Multiple Choice

Key and Glass Corporations were organized last year. They became an affiliated group and filed separate tax returns. This year, the corporations begin filing a consolidated tax return. Key and Glass report the following results: Which of the following statements is not correct?

• A) Key's last year NOL cannot offset Glass's last year profits.
• B) Key's last year NOL cannot offset this year's consolidated taxable income.
• C) Key's current year income must first be offset by Glass's current year loss.
• D) Glass cannot carry its current year loss back against last year's income.

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