(i) Stock owned, directly or indirectly, by or for a beneficiary of a trust (other than an employees’ trust described in section 401(a) which is exempt from tax under section 501(a)) shall be considered as owned by the trust, unless such beneficiary’s interest in the trust is a remote contingent interest. Stock owned, directly or indirectly, by or for a partner or a beneficiary of an estate shall be considered as owned by the partnership or estate. Attribution to Partnerships, Estates, Trusts, and Corporations If 50 percent or more in value of the stock in a corporation is owned, directly or indirectly, by or for any person, such person shall be considered as owning the stock owned, directly or indirectly, by or for such corporation, in that proportion which the value of the stock which such person so owns bears to the value of all the stock in such corporation. (ii )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 grantors and others treated as substantial owners) shall be considered as owned by such person. (i) Stock owned, directly or indirectly, by or for a trust (other than an employees’ trust described in section 401(a) which is exempt from tax under section 501(a)) shall be considered as owned by its beneficiaries in proportion to the actuarial interest of such beneficiaries in such trust. Stock owned, directly or indirectly, by or for a partnership or estate shall be considered as owned proportionately by its partners or beneficiaries. (ii) his children, grandchildren, and parents.” (i) his spouse (other than a spouse who is legally separated from the individual under a decree of divorce or separate maintenance), and “For purposes of those provisions of this subchapter to which the rules contained in this section are expressly made applicable- (1) Members of familyĪn individual shall be considered as owning the stock owned, directly or indirectly, by or for.
#Irc 864 code#
The first part of the code refers to attribution from and next portion refers to the attribution to. The Internal Revenue Code codified the rule in section 318. Another very common type of ownership is referred to as indirect ownership or “constructive ownership.” Constructive ownership of stock refers to ownership that is attributed to a person (usually) due to their relationship with another person.įor example, the spouse of someone who owns stock in a corporation may be deemed as the constructive owner of the stock owned by the other spouse. When it comes to the IRS and tax law, “direct ownership” is only one kind of ownership. But, not all stock ownership is direct ownership. IRC 318 & Constructive Ownership of Stock: When a person owns an asset – such as stock – and they paid for the stock and/or acquired it under their own name, they are considered the direct owner of the stock. IRC 318 and Regulations: Constructive Ownership of Stock IRC 318 Constructive Ownership of Stock
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