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    Controlled Groups and Brother-Sister Corporations

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    Which of the following groups constitute a controlled group? (Any stock not listed below is held by unrelated individuals each owning less than 1% of the outstanding stock). For brother-sister corporations, which definition applies?
    a. Mark owns 90% of the single classes of stock of Hot and Ice Corporations.

    b. Johnson and Carey Corporations each have only a single class of stock outstanding. The two controlling individual shareholders own the stock as follows:

    Stock Ownership Percentages
    Shareholder Johnson Corp. Carey Corp
    David 60% 80%
    Kelly 30% 0%

    c. Red, Blue and ABC Corporations each have a single class of stock outstanding. The stock is owned as follows:

    Stock Ownership Percentages
    Shareholder Blue Corp. ABC Corp
    Red 80% 50%
    Blue 40%

    Red Corporation's stock is widely held by over 1,000 shareholders, none of whom owns directly or indirectly more than 1% of Red's stock.

    d. Helm, Oak, Walnut and Zinnia Corporations each have a single class of stock outstanding. The stock is owned as follows:

    Stock Ownership Percentages
    Shareholder Helm Corp. Oak Corp Walnut Corp Zinnia Corp
    James 100% 90%
    Helm 80% 30%
    Walnut 60%.

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    https://brainmass.com/business/accounting/controlled-groups-brother-sister-corporations-553922

    Solution Preview

    a. This is not a controlled group because this is not a parent-subsidiary controlled group or brother-sister controlled group. In this case, Mark is an individual stock owner.
    A parent-subsidiary controlled group consists of a common parent corporation that owns a minimum of 80% of the ...

    Solution Summary

    The solution discusses the controlled groups and brother-sister corporations.

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