Key and Glass Corporations Were Organized Last Year

question 2

Multiple Choice

Key and Glass Corporations were organized last year.They became an affiliated group and filed separate tax returns.This year,the corporations begin filing a consolidated tax return.Key and Glass report the following results: Which of the following statements is not correct?

• A)Key's last year NOL cannot offset Glass's last year profits.
• B)Key's last year NOL cannot offset this year's consolidated taxable income.
• C)Key's current year income must first be offset by Glass's current year loss.
• D)Glass cannot carry its current year loss back against last year's income.

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Definitions:

Manchukuo

A puppet state in Northeast China and Inner Mongolia, established by Japan in 1932 and lasting until the end of World War II. It was part of Japan's imperialist expansion and occupation.

Pentagon

The United States Department of Defense's headquarters, a large office building near Washington, D.C., known for its distinctive pentagonal shape.

Decolonization

The process by which colonies gain independence from colonial powers, often through negotiations or conflict.