25. Which of the following statements is true regarding the filing of income tax

Question

25. Which of the following statements is true regarding the filing of income taxes for an affiliated group?

A) Domestic subsidiaries greater than 50% ownership must file a consolidated tax return.

B) Domestic subsidiaries greater than 60% ownership must file a consolidated tax return.

C) Domestic subsidiaries greater than 80% ownership must file a consolidated tax return.

D) Domestic subsidiaries greater than 80% ownership may file a consolidated tax return.

E) Foreign subsidiaries must file a consolidated tax return.

Explanation / Answer

D) Domestic subsidiaries greater than 80% ownership may file a consolidated tax return.

Filing consolidated return to domestic subsidiary is Previlege to them. So the word " May" is used.

Conclusion:- D) Domestic subsidiaries greater than 80% ownership may file a consolidated tax return.

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