Why do special restrictions on using the progressive corporate tax rates apply to controlled groups of corporations? Identify three restrictions on claiming multiple tax benefits that apply to controlled groups of corporations.

Why do special restrictions apply to controlled groups of corporations?

A.

Special restrictions apply to ensure corporations are not filtering money through one corporation for losses or profit to make a company look a specific way for investors.

B.

Special restrictions do not affect the tax paid for the controlled groups of corporations. Restrictions only apply to the amount of depreciation allowed, the amount of interest expense allowed, and the amount of bad debt to be taken on a yearly basis.

C.

Special restrictions apply because controlled groups must apportion tax benefits among its members to prevent them from avoiding limitations through the use of multiple related corporations.

D.

Special restrictions apply to allow owners of a corporation to allocate the corporation's income among two or more corporations and take advantage of a lower corporate tax rate on the first $10 million of corporate income for each corporation.