Which of the Following Statements Is False Regarding Consolidated Tax

question 33

Multiple Choice

Which of the following statements is false regarding consolidated tax returns?

• A) For a group of corporations filing a consolidated tax return, losses from certain intercompany transactions are deferred until realized through a transaction outside
• Of the group.
• B) To file a consolidated tax return, one corporation must own at least 50% of the stock of another corporation.
• C) For a group of corporations filing a consolidated tax return, an advantage is that losses of one group member may offset gains of another group member.
• D) An affiliated group can file a consolidated tax return only if it elects to do so.

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Definitions:

Ratio

A quantitative relationship between two numbers showing how many times the first number contains the second.

Proportion

A part, share, or number considered in comparative relation to a whole.

Overhead

The ongoing business expenses not directly attributed to creating a product or service, such as rent, utilities, and administrative costs.

Lowest Terms

The equivalent ratio having the smallest possible integers for its terms.