W Corp.owns 100 percent of the stock of three subsidiaries, X, Y, and Z.W, X, Y, and Z file a consolidated return for U.S.federal income tax purposes.W, X, and Y have nexus with both States A and B.Z has nexus only with State B.All four corporations comprise part of a unitary business.If combined reporting based on unitary principles is utilized in State A, how many corporations' income and apportionment figures will be taken into account?
A)1
B)2
C)3
D)4
E)None of the above

Question

Quizplus · Accepted Answer

In State A, all four corporations (W, X, Y, and Z) will be included in the combined report based on unitary principles, despite Z having nexus only with State B, because they are all part of a unitary business and W, X, and Y have nexus with State A.

W CorpOwns 100 Percent of the Stock of Three Subsidiaries, X