Cooper Corporation joined the Duck consolidated Federal income tax return group, when Cooper held a $1 million NOL carryforward. In its first year as a part of the Duck group, Cooper generated a $150,000 operating profit. For that year, Duck can deduct only $150,000 of Cooper's NOL in computing consolidated taxable income
a. True
b. False
Indicate whether the statement is true or false
True
RATIONALE: The deduction for a SRLY loss is limited to the lesser of the loss corporation's current or cumulative positive contribution to the group's consolidated taxable income. Here, that amount is the current year's $150,000 profit.
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