Final answer:
Mr. and Mrs. Dane and their six children may be an affiliated group eligible to file a consolidated corporate tax return if they meet the IRS criteria of common control and unitary business. An individual who owns a corporation and is the sole employee is liable for federal income tax, self-employment tax, and possibly corporate income tax, depending on the structure of the corporation.
Step-by-step explanation:
The question pertains to whether Mr. and Mrs. Dane and their six children, who own 100 percent of the stock in three family corporations, are considered an affiliated group eligible to file a consolidated corporate tax return. Under IRS regulations, a group of corporations may file a consolidated tax return if they are engaged in a unitary business under common control. Typically, common control entails direct ownership of at least 80 percent of the voting power and value of the stock. If Mr. and Mrs. Dane and their children meet these criteria with each of their family corporations, they could potentially file a consolidated return. However, there are additional rules and complexities to consider when determining eligibility for filing a consolidated return.
Regarding the question about the types of federal tax an individual would have to pay if they own a corporation and are the only employee, the individual will generally be responsible for several types of taxes. These typically include federal income tax, self-employment tax (which covers Social Security and Medicare taxes), and potentially corporate income tax, depending on the corporate structure. If the corporation is a C corporation, it would pay its own corporate income tax, whereas if it's an S corporation or LLC taxed as a disregarded entity, income and losses are passed through to the owner's personal tax return.