New York,Inc.owns 100% of Brooklyn,Inc.and Queens,Inc.Taxable income for the three corporations for their first year was as follows: Which of the following statements is false?

Question

New York,Inc.owns 100% of Brooklyn,Inc.and Queens,Inc.Taxable income for the three corporations for their first year was as follows:   Which of the following statements is false?

Quizplus · Accepted Answer

According to the IRS regulations, a foreign corporation cannot be a member of a consolidated return. Therefore, if Brooklyn, Inc. is a foreign corporation, it cannot be part of a consolidated return, making statement C false. Statements A, B, and D are true. Consolidated taxable income is calculated by adding the taxable income of all the corporations that are part of the group. If a consolidated return is filed, a loss from one corporation can offset profits of another corporation, resulting in a tax benefit. Electing to file a consolidated tax return is optional for affiliated groups.