Delta Corporation owns 90 percent of Sigma Company, and Sigma owns 90 percent of Pi, Inc. all of which are domestic corporations. Information for the three companies for the year ending December 31, 2013 follows: Which of the following statements is true?

Delta and Sigma must file a consolidated income tax return, but must exclude Pi from the consolidated return.

Delta, Sigma, and Pi must file a consolidated income tax return.

Delta, Sigma, and Pi must file separate income tax returns because the ownership of Sigma and Pi is less than 100%.

Delta, Sigma, and Pi will probably not file a consolidated income tax return.

Delta, Sigma, and Pi may file separate income tax returns or a consolidated income tax return.