ParentCo and SubOne Have Filed Consolidated Returns Since Year 1

ParentCo and SubOne have filed consolidated returns since Year 1. SubTwo was formed in Year 3 through an asset spin-off from ParentCo. SubTwo has joined in the filing of consolidated returns since then. Taxable income computations for the members include the following. None of the group members incurred any capital gain or loss transactions during these years, nor did they make any charitable contributions. $$\begin{array} { c c c c c } & \text { ParentCo's } & \text { SubOne's Taxable } & \text { SubTw o's Taxable } & \text { Consolidated } \\\text { Year } & \text { Taxable Income } & \text { Income } & \text { Income } & \text { Taxable Income } \\\text { Year 2 } & \$ 100,000 & \$ 50,000 & \text { N/A } & \$ 150,000 \\\text { Year 3 } & \$ 30,000 & ( \$ 30,000 ) & \$ 10,000 & \$ 10,000 \\\text { Year 4 } & \$ 50,000 & ( \$ 40,000 ) & \$ 40,000 ) & ? \\\text { Year 5 } & \$ 130,000 & \$ 130,000 & \$ 10,000 & ?\end{array}$$ If ParentCo does not elect to forgo the carryback of the Year 4 net operating loss, how much of that year's consolidated net operating loss is carried back to offset prior years' income?

A) $80,000
B) $40,000
C) $30,000
D) $0