§ 318. Constructive ownership of stock
(a)
General rule
For purposes of those provisions of this subchapter to which the rules contained in this section are expressly made applicable—
(1)
Members of family
(2)
Attribution from partnerships, estates, trusts, and corporations
(A)
From partnerships and estates
Stock owned, directly or indirectly, by or for a partnership or estate shall be considered as owned proportionately by its partners or beneficiaries.
(B)
From trusts
(C)
From 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.
(3)
Attribution to partnerships, estates, trusts, and corporations
(A)
To partnerships and estates
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.
(B)
To trusts
(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. For purposes of this clause, a contingent interest of a beneficiary in a trust shall be considered remote if, under the maximum exercise of discretion by the trustee in favor of such beneficiary, the value of such interest, computed actuarially, is 5 percent or less of the value of the trust property.
(4)
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.
(5)
Operating rules
(A)
In general
Except as provided in subparagraphs (B) and (C), stock constructively owned by a person by reason of the application of paragraph (1), (2), (3), or (4), shall, for purposes of applying paragraphs (1), (2), (3), and (4), be considered as actually owned by such person.
(B)
Members of family
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.
(C)
Partnerships, estates, trusts, and corporations
Stock constructively owned by a partnership, estate, trust, or corporation by reason of the application of paragraph (3) shall not be considered as owned by it for purposes of applying paragraph (2) in order to make another the constructive owner of such stock.
(D)
Option rule in lieu of family rule
For purposes of this paragraph, if stock may be considered as owned by an individual under paragraph (1) or (4), it shall be considered as owned by him under paragraph (4).
(b)
Cross references
For provisions to which the rules contained in subsection (a) apply, see—
(6)
section
856
(d) (relating to definition of rents from real property in the case of real estate investment trusts);