Paint,Inc. ,a domestic corporation,owns 80% of Blue,Ltd. ,a foreign corporation and Yellow,Inc. ,a domestic corporation.Paint also owns 50% of Green,Inc. ,a domestic corporation.Paint receives no distributions from any of these corporations.Which of these entities' net income are included in Paint's Federal tax return for the current year assuming Paint elects to include all eligible entities in its consolidated tax return?

Question

Quizplus · Accepted Answer

In a consolidated tax return, only domestic corporations that are part of an affiliated group can be included. Paint and Yellow, both domestic, are eligible. Blue, being foreign, and Green, with only 50% ownership, are not included.

Paint,Inc ,A Domestic Corporation,owns 80% of Blue,Ltd