Blue and Gold Corporations are members of the Blue-Gold affiliated group, which filed a consolidated tax return for last year, reporting a $200,000 consolidated NOL. Small taxable income amounts were reported by Blue and Gold in separate tax returns filed in years prior to last year. Early in the current year, 100% of Blue's stock is purchased by Robert Martin who contributes additional funds to Blue Corporation sufficient to acquire all of Green Corporation's stock. For the current year, the affiliated group reports the following results (excluding the consolidated NOL deduction):
Corporation Taxable Income
Blue $150,000
Gold ( 25,000)
Green (since acquisition) 100,000
Which of the following statements is correct?
A) Last year's NOL cannot be carried back.
B) The portion of last year's NOL that is not used as a carryback can be carried over the current year but is only used against Blue's taxable income.
C) The portion of last year's NOL that is not used as a carryback can be carried over against the current consolidated taxable income, but is subject to the Sec. 382 limitation.
D) The portion of last year's NOL that is not used as a carryback can be carried over, but is used only against the Blue's and Gold's taxable income.
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