Common Parent Entity

An expanded affiliated group is generally defined in accordance with the principles of Code section 1504(a) to mean one or more chains of members connected through ownership by a common parent entity if the common parent entity directly owns stock or other equity interests meeting the requirements of Treas. Reg. 1.1471-5(i)(4) in at least one of the other members (without applying the constructive ownership rules of section 318).  Generally, only a corporation shall be treated as the common parent entity of an expanded affiliated group, unless the taxpayer elects to follow the approach described in Treas. Reg. 1.1471-5(i)(10).