P is a publicly held corporation with a subsidiary S of which P has always owned 100% of the outstanding stock. P has taxable income of $1,000,000 and S has taxable income of $100,000.

A. Corporate incoem tax on P is $340,000 and on S is $22,500

B. The tax is as in answer a. as long as P and S have consented to an appointment plan giving 100% of the lower bracket benefits to S.

c. The corporate income tax is $340,000 on P and $34,000 on S.

d. None of the above