An affiliated group consists of a parent company that directly owns 80% of at least one subsidiary corporation plus all other subsidiaries that are 80% owned within the group.

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An affiliated group is defined by the Internal Revenue Service (IRS) as a group of companies that are related through common ownership. The parent company must directly own at least 80% of one subsidiary corporation, and all other subsidiaries within the group that are 80% owned. This definition is used for tax purposes and allows affiliated companies to file a consolidated tax return.

An Affiliated Group Consists of a Parent Company That Directly