Roland,Shedrick,and Tyrone Corporations Formed an Affiliated Group a Number of Years

question 44

Multiple Choice

Roland,Shedrick,and Tyrone Corporations formed an affiliated group a number of years ago,which has since filed consolidated tax returns.No prior Sec 1231 losses have been reported by any group member.The group had a consolidated capital loss carryover last year.For the current year,the group reports the following results: Which of following statements is incorrect?

• A)No Sec.1231 recapture can occur this year.
• B)The net capital gain is taxed at the regular corporate tax rates.
• C)The Sec.1231 loss is treated as an ordinary loss.
• D)The net capital gain is $20,000.