Question

Identify which of the following statements is false.

A) A controlled group must apportion certain tax benefits among its members.
B) Brown Corporation owns 60% of Clark Corporation and 65% of Davis Corporation. Davis Corporation owns 10% of Clark Corporation, and Clark Corporation owns 10% of Davis Corporation. The remaining stock is owned by an individual shareholder. Brown, Davis, and Clark Corporations are a parent-subsidiary controlled group.
C) The controlled group test is applied on December 31.
D) There are three categories of control groups: parent-subsidiary, brother-sister, and combined

Answer 1

The false statement is that the controlled group test is applied on December 31.

Step-by-step explanation:

In this multiple-choice question, you are asked to identify the false statement regarding controlled groups. The false statement is option C) The controlled group test is applied on December 31.

The controlled group test is not applied on a specific date such as December 31. Instead, it is a test that determines whether certain businesses are considered a single employer for tax purposes. It involves examining the ownership structure and relationships between different businesses.