Identify which of the following statements is true.
A)When a new corporation joins an affiliated group, all of its income and expense items for the tax year, including the acquisition date, must be allocated between the separate tax return and consolidated tax return that are to be filed based on the number of days included in each of the two tax years.
B)A consolidated return election may be revoked after 5 years.
C)All members of a consolidated group must use the same tax year.
D)All of the above are false.

Question

Quizplus · Accepted Answer

All members of a consolidated group must use the same tax year. Option A is false since the allocation is based on the number of days included in each of the two tax years. Option B is false since once a consolidated return election is made and validly filed, it cannot be revoked without the consent of the IRS.

Identify Which of the Following Statements Is True