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) Lauren owns 100% of Corporation A stock and 100% of Corporation B stock. Corporation A and Corporation B form a controlled group.
C) 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.
D) Corporation A owns 100% of Corporation B. Corporation A and Corporation B form a controlled group.

Question

Quizplus · Accepted Answer

Having several entities treated as a controlled group does not automatically allow each corporation in the group to use the 15% tax bracket in the corporate tax rate schedule in computing its regular income tax liability. Each corporation must still meet the requirements for use of the lower tax bracket.

Which of the Following Statements Regarding Controlled Groups Is False