Identify Which of the Following Statements Is True

question 72

Multiple Choice

Identify which of the following statements is true.

• A)An affiliated group member's allocated share of an NOL from a consolidated return year may not be available as a carryback to a separate return year of the common parent corporation.
• B)If a corporation ceases to be a member of an affiliated group,the corporation is entitled to carry forward its share of the consolidated NOL even if the NOL could be used in full on the consolidated return for the year of cessation.
• C)The SRLY (separate return limitation year)rules are designed to prevent the affiliated group from offsetting its current year taxable income by purchasing corporations having NOL carryovers in order to use their NOLs.
• D)All of the above are false.

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Definitions:

Contractual Duty

An obligation agreed upon in a contract that one party must perform for the other.

Revocation

The official cancellation of a decree, decision, or promise.

Rejection

Refusal to accept, approve, or support something.

Obligations

Legal or moral responsibilities and duties that an entity is required to fulfill.