_____ Which of the following is false concerning the filing of a consolidated tax return?
A) Operating losses of companies having losses can offset operating profits of companies having profits.
B) Capital losses of one company can offset capital gains of other companies.
C) Capital losses of one company can offset operating profits of companies having profits.
D) Section 482 fair transfer pricing problems are avoided.
E) None of the above.

Question

Quizplus · Accepted Answer

C is false because capital losses can only offset capital gains on a consolidated tax return, not operating profits. Operating losses can offset operating profits, but capital losses are treated differently and have their own rules for offsetting gains.

_____ Which of the Following Is False Concerning the Filing