Why are the negative earnings and profits (E&P) of the target not added to the positive E&P of an acquiring corporation when creating the successor corporation's initial E&P?

a. The negative E&P constitutes the target's NOL that will be deducted against future income of the successor corporation.

b. The continuity of business, which applies for two years following an ownership change, would be violated by combining the E&P of the target and the acquiring immediately. After two years the combining is permitted.

c. Adding the target negative E&P to the positive acquiring E&P would misrepresent the economic profitability of the successor for determining the adjusted currents earnings for the alternative minimum tax.

d. The accumulated earnings and profit tax requires that the E&P accounts be maintained separately whether they are positive or negative for five years after a restructuring.

e. None of these choices are correct.