4.

In 2001, the Treasury unit of Consolidated Lint (located at its Company

headquarters at 40 Wall Street) purchased 1 percent of the outstanding stock of

Argo Inc., a gold mining company listed on the New York Stock Exchange. In

2013, the stock is sold for a $100,000 profit. Can Connecticut (assuming

Consolidated Lint has lint business nexus in CT) tax the gain on the sale of the

stock?

a.

Can Connecticut require Consolidated Lint to allocate interest and other

expenses against non-unitary income? Why might it require this?

b.

Can Connecticut require Consolidated Lint to allocate all of its interest

expense to offset non-unitary income?