Jonathan owns 60% of Carweb.com Ltd. and 70% of Taxman Inc. Jonathan also owns 49% of Internet Housefind Ltd. The remaining shareholders in all three corporations are unrelated parties. Each of the three companies has at least $ 500,000 of active business income.

Required:

What is the maximum combined small business deduction (that is, the total combined small business deduction of all three companies) that the three companies can claim on corporate income based on only the above information?

1. $ 500,000
2. $ 1,000,000
3. $ 1,500,000
4. $ 0
5. None of the above