Last Year,Trix Corporation Acquired 100% of Track Corporation

question 14

Multiple Choice

Last year,Trix Corporation acquired 100% of Track Corporation.The acquisition occurred on July 1,which was five months after Track's creation.The corporations filed separate returns that year and have filed consolidated returns since then.The group results for the years,excluding the NOL deduction,are shown below. Which of the following statements is incorrect?

• A)Last year is an SRLY (separate return limitation year)with respect to Track Corporation.
• B)Track's last year loss is offset against the consolidated current taxable income.
• C)Track's last year loss can be used to offset the current year's consolidated taxable income.
• D)None of Track's last year's loss can be used to offset the current year's consolidated taxable income.

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Definitions:

Cystic Fibrosis

A genetic disease affecting the lungs and digestive system, characterized by thick, sticky mucus leading to infections and digestion problems.

Mucus Thickens

A condition where the mucus becomes more viscous, often leading to congestion and difficulty in breathing or clearing passages.

Meconium Ileus

A blockage of the small intestines caused by thick, sticky meconium in newborn babies, often associated with cystic fibrosis.

Cystic Fibrosis

A genetic disorder that affects the lungs, pancreas, and other organs, leading to thick sticky mucus production, which causes respiratory and digestive problems.