Which of the following statements is true with regard to intercompany transactions?
A)The gain or loss on an intercompany transaction is never taxed.
B)An intercompany transaction is eliminated from consolidated taxable income.
C)All intercompany gains are recognized, but losses must be deferred.
D)A cash sale of a business asset by the purchasing member to an acquirer outside of the group triggers immediate recognition of the gain or loss.
E)The gain or loss on an intercompany transaction is deferred for up to ten years, after which it is recognized.

Question

Quizplus · Accepted Answer

Both gains or losses on intercompany transactions are deferred until a restoration event triggers the recognition of income.

Which of the Following Statements Is True with Regard to Intercompany