Tax Drill - Book-Tax Differences

Indicate whether the following statements are "True" or "False" regarding book and tax differences.

1. The income tax expense reported on a corporation's financial statement is the combination of the entity's Federal, state, local, and foreign income taxes.
2. For Federal income tax purposes, a U.S. corporation may elect to include any domestic subsidiaries that are 80 percent or more owned in its consolidated U.S. tax return.
3. On a tax return, Schedule R1 or R3 reconciles the differences between an entity's book income and its taxable income.