Question

Identify which of the following statements is true.

A) A corporation is required to file a tax return even if it has no taxable income.
B) A corporate tax return must be filed by the fifteenth day of the fourth month following the close of the corporationʹs tax year.
C) A corporation with gross receipts, total income, and total assets of $1,000,000 or less is permitted to file Form 1120-A.
D) All of the above are false.

Answer 1

The true statement is that a corporation must file a tax return even without taxable income. The deadlines for corporate tax returns have changed and Form 1120-A is discontinued, making the other statements false.

Step-by-step explanation:

The correct statement among the provided options is A) A corporation is required to file a tax return even if it has no taxable income. This is because corporations, as separate legal entities, must report their financial activities annually, irrespective of whether they have earned a profit or incurred a loss. It's the corporation's legal responsibility to file a federal income tax return.

Statement B) is outdated, as the deadline to file a corporate tax return (Form 1120) was changed from the fifteenth day of the third month to the fifteenth day of the fourth month following the end of the corporation's tax year. However, the new deadline does not mean statement B is true, as it mixes up the previous and current deadlines.

Statement C) is incorrect because Form 1120-A was discontinued and can no longer be used, making this option outdated and false.

Thus only option A is true, and by elimination, option D is incorrect as all of the above statements are not false.