Ed has supported his stepdaughter, her husband, and their child since his wife’s death three years ago. Ed promised his late wife that he would support her daughter from a former marriage and her daughter’s husband until they both finished college. They live in another state, and meet gross income filing requirements. Is Ed entitled to dependency exemptions for the three individuals? A partial list of research sources is
• Sec. 152
• Reg. Sec. 1.152-2
• Desio Barbetti, 9 T. C. 1097 (1947)

The stock of grommet corporation, a u.s. company, is publicly traded, with no single shareholder owning more than 5 percent of its outstanding stock. grommet owns 95 percent of the outstanding stock of staple inc., also a u.s. company. staple owns 100 percent of the outstanding stock of clip corporation, a canadian company. grommet and clip each own 50 percent of the outstanding stock of fastener inc., a u.s. company. grommet and staple each own 50 percent of the outstanding stock of binder corporation, a u.s. company. which of these corporations form an affiliated group eligible to file a consolidated tax return?