Which of the following statements regarding controlled groups is false?
A) The purpose of the controlled group rules is to essentially treat the group as though it were one entity for purposes of determining certain tax benefits.
B) Having several entities treated as a controlled group is advantageous for tax purposes because each corporation in the group is allowed to use the 15% tax bracket in the corporate tax rate schedule in computing its regular income tax liability.
C) Lauren owns 100% of Corporation A stock and 100% of Corporation B stock. Corporation A and Corporation B form a controlled group.
D) Corporation A owns 100% of Corporation B. Corporation A and Corporation B form a controlled group.

Question

Quizplus · Accepted Answer

This statement is false because the controlled group rules do not affect the corporate tax rate schedule or the tax brackets. Each corporation in a controlled group still uses the same tax rate schedule as it would if it were not part of the group. The purpose of the controlled group rules is to coordinate and allocate certain tax benefits and restrictions among the group members.

Which of the Following Statements Regarding Controlled Groups Is False