Which of the following statements is false regarding consolidated tax returns?
A)An affiliated group can file a consolidated tax return only if it elects to do so.
B)To file a consolidated tax return, one corporation must own at least 50 percent of the stock of another corporation.
C)For a group of corporations filing a consolidated tax return, an advantage is that losses of one group member may offset gains of another group member.
D)For a group of corporations filing a consolidated tax return, losses from certain intercompany transactions are deferred until realized through a transaction outside of the group.

Question

Quizplus · Accepted Answer

The false statement is that to file a consolidated tax return, one corporation must own at least 50 percent of the stock of another corporation. While ownership is a requirement for affiliation, the specific ownership percentage required can vary depending on the circumstances (such as in the case of a brother-sister group).

Which of the Following Statements Is False Regarding Consolidated Tax