Which of the Following Potentially Is a Disadvantage of Electing

question 65

Multiple Choice

Which of the following potentially is a disadvantage of electing to file a Federal consolidated corporate income tax return?

• A) The § 1231 loss of one member is not offset against the § 1231 gain of another member of the group.
• B) Recognition of losses from certain intercompany transactions is deferred.
• C) The tax basis of investments in the stock of subsidiaries is unaffected by members contributing to consolidated taxable income.
• D) All of the above are disadvantages of a consolidation election.

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Definitions:

Internal

Pertaining to or situated within the interior of something, often referring to processes or affairs happening within an organization or entity.

Profit Motive

The intent to achieve financial gain, which drives individuals and companies to engage in business activities.

Government Subsidies

Financial support provided by the government to firms, individuals, or other governmental bodies, often aimed at promoting economic and social policies.