Giant Ltd. owns 100% of the stock of Middle Corporation. Bottom Corp is owned 60% by Giant and 40% by Middle.
Giant's Federal consolidated income tax return includes both Middle and Bottom.

Question

Quizplus · Accepted Answer

In a federal consolidated tax return, a parent company can include subsidiaries if it owns at least 80% of their stock. Giant Ltd. indirectly owns 100% of Bottom Corp through its 100% ownership of Middle Corporation, which owns 40% of Bottom Corp.

Giant Ltd Owns 100% of the Stock of Middle Corporation