Evan owns 45% of Yolo Corporation and 40% of Xeqz Corporation. Farra owns 37% of Yolo Corporation and 48% of Xeqz Corporation. Gao owns 5% of Yolo Corporation but does not own any stock in Xeqz. Each corporation has only one class of stock. Yolo and Xeqz Corporations form a(an)
A) parent-subsidiary controlled group.
B) brother-sister controlled group.
C) combined controlled group.
D) unrelated group of corporations.
B) brother-sister controlled group.
Taking Evan's and Farra's ownership interests into account, the group meets both the 80%-50% test and the 50%-only test. The 50% test is met because common ownership of Evan (40%) and Farra (37%) exceeds 50%. Counting Evan's and Farra's ownership interests in the two corporations, they each add up to more than 80%. Gao's ownership is not taken into account because he only owns stock in one corporation.
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