Page:United States Statutes at Large Volume 78.djvu/165

 78 STAT. ]

PUBLIC LAW 88-272-FEB. 26, 1964

123

" (1) PARENT-SUBSIDIARY CONTROLLED OROI r.—For purposes of
 * '(d) RuLi':s FOR DETKKMINIXG STOCK OWNERSHIP.—

determining whether a corporation is a member of a parent-subsidiary controlled group of corporations (within the meaning of subsection (a)(1)), stock owned by a corporation means— " (A) stock owned directly by such corporation, and " (B) stock owned with the application of subsection (e)(1). " (2) BROTHER-SISTER CONITIOIXED GROUP.—For purposes of de-

termining whether a corporation is a member of a brother-sister (Controlled group of corporations (within the meaning of subsection (a)(2)), stock owned by a person who is an individual, estate, or trust means— " (A) stock owned directly by such person, and " (B) stock owned with the application of subsection (e).
 * '*(e) CONSTRUCTIVE OWNERSHIP.—

"(1) OPTIONS.—If any person has an option to acquire stock, such stock shall be considered as owned by such person. For purposes of this paragraph, an option to acquire such an option, and each one of a series of such options, shall be considered as an option to acquire such stock. " (2) ATTRIBUTION FROM PARTNERSHIPS.—Stock owned, directly

or indirectly, by or for a partnership shall be considered as owned by any partner having an interest of 5 percent or more in either the capital or profits of the partnership in proportion to his interest in capital or profits, whichever such proportion is the greater. " (3) ATTRIBUTION FROM ESTATES OR I-RUSTS.—

" (A) Stock owned, directly or indirectly, by or for an estate or trust shall be considered as owned by any beneficiary who has an actuarial interest of 5 percent or more in such stock, to the extent of such actuarial interest. For purposes of this subparagraph, the actuarial interest of each Deneficiary shall be determined by assuming the maxinmm exerc;ise of discretion by the fiduciary in favor of such l)eneficiary and the maximum use of such stwk to satisfy his rights as a beneficiary. " (B) Stock owned, directly or indirectly, by or for any portion of a trust of which a person is considered the owner under subpart E of part I of subchapter J (relating to grant- ^^^ ^tat. 226. ors and others treated as substantial owners) shall l>e con- ^^"^*^ 671-678. sidered as owned by such person. " (C) This paragraph shall not apply to stock owned by any employees' trust described in section 401(a) which is,^^f^^f^^^\^i1', j>

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exenipt from tax under section 501(a). 26 USC 401, so 1. ••(4) ArrKiBUTioN FROM CORPORATIONS.—Stock owned, directly or indirectly, by or for a corporation shall be considered as owned b}' any person who owns (within the meaning of subsection (d)) 5 percent or more in value of its stock in that proportion which the value of the st<K'-k which such person so owns bears to the value of all the stock in such corporation. "(.5) SPOUSE.—An individual shall be considered as owning stock in a corjjoration owned, directly or indirectly, by or for his spouse (other than a spouse who is legally separated from the individual under a decree of divorce Avhether interlocutory or final, or a decree of separate maintenance), except in the case of a corporation with respect to which each of the following condi_ tions is satisfied for its taxable year—

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