Which of the following tax effects becomes more restrictive if an election is made to file a group's Federal corporate income tax returns on a consolidated basis?
A)Choice of members' tax accounting methods
B)Use of the lower tax rate brackets.
C)Use of the $40,000 AMT exemption.
D)Members who are liable for the consolidated tax liability.

Question

Quizplus · Accepted Answer

When a group elects to file their Federal corporate income tax returns on a consolidated basis, each member becomes jointly and severally liable for the consolidated tax liability. This can be more restrictive for members who may have had a lower tax liability if they filed on their own. Therefore, (D) Members who are liable for the consolidated tax liability becomes more restrictive. The other options listed do not necessarily become more restrictive with this election.

Which of the Following Tax Effects Becomes More Restrictive If