Section 318 Constructive Ownership Rules

For purposes of those provisions of this subchapter to which the rules contained in this section are expressly made applicable 1 members of family a in general.

Section 318 constructive ownership rules. The 318 rules always require attribution between parents and children regardless of age. For purposes of sections 951 b 954 d 3 956 c 2 and 957 section 318 a relating to constructive ownership of stock shall apply to the extent that the effect is to treat any united states person as a united states shareholder within the meaning of section 951 b to treat a person as a related person within the meaning of section 954 d 3 to treat the stock of a domestic corporation as owned by a united states shareholder of the controlled foreign corporation for purposes of. For purposes of these 35 percent ownership rules an individual will be treated as a constructive owner only if that individual himself or herself is a substantial contributor a foundation manager or a 20 percent owner of the combined voting power profits interest or beneficial interest of a substantial contributor.

In general under these rules stock owned by a partner is treated as owned by a partnership regardless of the partner s ownership in the partnership. Constructive ownership of stock a general rule. Under 1563 on the other hand attribution between parents and children over the age of 21 is dependent on other direct and attributed ownership held by each person.

Internal revenue code section 318 a 1 constructive ownership of stock. For purposes of those provisions of this subchapter to which the rules contained in this section are expressly made applicable 1 members of family. If 50 percent or more in value of the stock in a corporation is owned directly or indirectly by or for any person such corporation shall be considered as owning the stock owned directly or indirectly by or for such person.

As in the previous question it depends on which set of rules. 1 318 4 constructive ownership as actual ownership. 318 a 5 c partnerships estates trusts and corporations.

Stock constructively owned by an individual by reason of the application of paragraph 1 shall not be considered as owned by him for purposes of again applying paragraph 1 in order to make another the constructive owner of such stock.