Schnee (1999) describes the process of defining an affiliated group
             in order to elect to file a consolidated tax return. He notes that in
             order to qualify as a member of an affiliated group "the group must own
             stock representing at least 80% of the voting power and 80% of the value of
             the subsidiary. A recent case explored the definition of voting power." It
             is important to note that the phrase "80% of voting power is not clearly
             defined", but has been historically defined as the ability to elect members
             of the board of directors. Recently, the IRS ruled against the
             consolidation of the income tax returns of Alumax and Amax corporations,
             based on limitations of the board's power, although the affiliated group
             held 80% of the ability to elect members of the board of directors for
             Rainey and Yates (1996) note six new elections, to be considered
             annually that can impact consolidated tax returns. Consolidated companies
             can avoid double taxation by making an election that applies to
             intercompany stock gains or loss. An election can be filed with a group's
             consolidated return that identifies amounts of loss carryovers in order to
             waive loss carryovers from separate return limitation years. They note
             that Regs. Sec. 1.1502-31(e) permits an election that a loss carryover
             attributable to the common parent expires prior to a change in group
             structure (such as when a group becomes a subsidiary). Another new
             election gives an alternative where extraordinary items such as income and
             deductions of a subsidiary can be allocated ratably. New regulations
             eliminate the potential for prematurely triggering intercompany stock gains
             by allowing a one-time election that can be applied to all intercompany
             stock losses or gains before the July 12, 1995 tax years. Finally, one
             election can be used to adjust earnings and profits of a subsidiary, and
             reduces the need for the use of two sep...