Pub Corporation owns 60 percent of Sam Corporation and 80 percent of Tim Corporation. Tim owns 20 percent of Sam. Separate income and loss data (not including investment income) for the three affiliates for 2011 are as follows:

Pub ...... $800,000 separate income

Sam ..... $300,000 separate income

Tim ...... ($400,000) separate loss

There are no differentials or unrealized profits to consider in measuring 2011 income.