Page:United States Statutes at Large Volume 50 Part 1.djvu/844

 75TH CONGRESS, 1ST SESSION-CH. 8 1 5-AUGUST 26, 1937 received from the sale or other disposition of such a contract. This subsecti on shall a pply with respect to amounts r eceived fo r services under a particular contract only if at some time during the taxable year 25 per centum or more in value of the outstanding stock of the corporation is owned, directly or indirectly, by or for an individual who h as perf ormed, is to p erform, or may be des ignated (by name or by description ('~ 1 as the one to per form, such services. "(f) USE OF CORPORATION PROPERTY BY SHAREHO LDER .-A mou nts received as compensation (however designated and from whomsoever received) for the use of, or right to use, property of the corporation in any case where, at any time during the taxable year, 25 per centum or more in value of the outstanding stock of the corporation is owned, directly or indirectly, by or for the individual entitled to the use of the property ; whether such right is obtained directly from the cor- poration or by mean s of a sub lease or ot her arrang ement . "(g) RENTS .-Rents, unless constituting 50 per centum or more of the gross income. For the purposes of this subsection the term rents' means compensation, however designated, for the use of, or right to use, property ; but does not include amounts constituting foreign personal holding company income under subsection (f). "SEC. 333 . STOCK OWN ERSHIP . " (a) CONSTRUCTIVE OWNERSHIP .-For the purpose of determining whether a f oreign cor poration i s a foreig n personal holding c ompany, insofar a s such det ermination is based o n stock ow nership un der sec- ti on 331 (a) (2), section 332 (e), or section 332 (f)- "(1 STOCK NOT OWNED BY INDIVIDUAL .-Stock owned, directly or indirectly, by or for a corporation, partnership, estate, or trust shall be considered as being owned proportionately by its shareholders, partners, or beneficiaries . " (2) FAMILY AND PARTNERSHIP OWNERSHIP .-An individual shall be considered as owning the stock owned, directly or indirectly, by or for his family or by or for his partner. For the purposes of this paragraph the family of an individual includes only his brothers and sisters (whether by the whole or half blood), spouse, ancestors, and lineal descendants. "(3) OPTIONS .-If any person has an option to acquire stock such stock shall be considered as owned by such person . For the purposes of this paragraph an option to acquire such an option, and each one of a series of such options, shall be consid- ered as an option to acquire such stock . " (4) APPLICATION OF FAMILY-PARTNERSHIP AND OPTION RULES .- Paragraphs (2) and (3) shall be applied- "(A) F or the purpose s of th e stock owners hip re quire- ment provided in section 331 (a) (2 ), if, but only if, the ef fect is to make the c orporation a foreign personal holding com any ; "(B) F or the purpose s of se ction 332 (e) (relating to personal service contracts), or of section 332 (f) (relating to the use of property by shareholders), if, but only if, the ef fect is to make the a mounts the rein refer red to inc ludible under such subsection as foreign personal holding company income. " (5) CONSTRUCTIVE OWNERSHIP AS ACTUAL OWNERSHIP .-Stock constructively owned by a person by reason of the application of paragraph (1) or (3) shal l, for the pur pose of applyi ng paragraph (1) or (2), be treated as actually owned by such person ; but stock constructively owned by an individual by rea- son of the application of paragraph (2) shall not be treated as owned by him for the purpose of again applying such paragraph in order to make another the constructive owner of such stock . 819 Use of corporation pr ope rty by share- ho lder . Rents . Stock ow nership . Constructive own . ership . Ante, p. 818. Stock not owned by individual . Family and part . nership ownership . Options . Application of fam- ily-partnership and option riles . Ante, p. 818. Ante, p. 818 . Constructive own . ership as actual own . ership.