TAX 9869 Lecture Notes - Lecture 66: Fiction Collective Two

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11 Aug 2020
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Stock attribution rules apply to determine the 10% shareholder and cfc status. Three rules: direct ownership, indirect ownership, constructive ownership, first determine who owns the stock directly, the indirect ownership rule is basically a look through rule. Shareholders, partners, and beneficiaries will be deemed to own their proportionate share of a foreign corporation that is owned by a corporation partnership trust or estate. For indirect ownership we need to look at foreign entities to see who the us owners are. Constructive ownership - s318 and there are spec. Modifs in cfc + ussh rules that perhaps changed aspects of s318. Example: us corporation owns 20% of foreign corporation fc1 which in turn owns 50% percent of foreign corporation fc2. Dc is deemed to own 10% of fc2 (20% of 50%. ) Example of direct ownership: us corporation owns of foreign corporation (directly) Indirect ownership as defined above basically means through foreign entities.

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