Identify Which of the Following Statements Is False

question 56

Multiple Choice

Identify which of the following statements is false.

• A) A controlled group must apportion certain tax benefits among its members.
• B) There are three categories of control groups: parent- subsidiary, brother- sister, and combined.
• C) The controlled group test is applied on December 31.
• D) Brown Corporation owns 60% of Clark Corporation and 65% of Davis Corporation. Davis Corporation owns 10% of Clark Corporation, and Clark Corporation owns 10% of Davis Corporation. The remaining stock is owned by an individual shareholder. Brown, Davis, and Clark Corporations are a parent- subsidiary controlled group.

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Definitions:

Uninsured Savings

Savings not protected by government insurance, exposing depositors to potential loss if the financial institution fails.

Reserve Requirement

The minimum amount of reserves a bank must hold against deposits, as mandated by central banking authorities.

Commercial Banks

Financial institutions that provide a range of services, including accepting deposits, providing loans, and offering other financial products.

Bank Failures

The occurrence when a bank is unable to meet its obligations to its depositors or other creditors because it has become insolvent or too illiquid to meet its liabilities.