The stock of Wheel Corporation, a U.S. company, is publicly traded, with no single shareholder owning more than 5 percent of its outstanding stock. Wheel owns 90 percent of the outstanding stock of Axle, Inc, also a U.S. company. Axle owns 100% of the outstanding stock of Tire Corporation, a German company. Wheel and Tire each own 50 percent of the outstanding stock of Bumper, Inc., a U.S. company. Wheel and Axle each own 50 percent of the outstanding stock of Trunk Corporation, a U.S. company. Which of these corporations form an affiliated group eligible to file a consolidated tax return?
A. Wheel, Axle, Tire, Bumper, and Trunk are an affiliated group.
B. Wheel, Axle, and Trunk are an affiliated group.
C. Wheel, Axle, and Tire are an affiliated group.
D. Wheel and Axle are an affiliated group.
Answer: B
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