ParentCo and SubCo Have Filed Consolidated Returns Since Both Entities

question 7

Multiple Choice

ParentCo and SubCo have filed consolidated returns since both entities were incorporated in 2009.Taxable income computations for the members include the following.Neither group member incurred any capital gain or loss transactions during these years,nor did they make any charitable contributions.

The 2011 consolidated loss:

• A)must be carried forward before it can be carried back.
• B)must be carried forward,unless an election to forgo carryforward is made by the parent.
• C)must be carried back,unless an election to forgo the carryback is made by the parent.
• D)can only be used to offset SubCo's future income.
• E)cannot be used to offset any of ParentCo's 2009 income.

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Definitions:

Nonservo Brake

A drum brake system where the shoes are not self-energizing, typically requiring more pedal force for braking.

Servo Action

A mechanism that uses feedback to control a device, commonly found in systems requiring precise control of position or speed.

Anchor

A device used to connect a vessel to the bed of a body of water to prevent the craft from drifting due to wind or current.

Leading-Trailing Brake Designs

A drum brake configuration where one brake shoe is positioned to lead and press against the drum due to rotational forces, and the other trails and provides lesser braking force.