TAX 9869 Lecture 64: Constructive ownership under Sec

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11 Aug 2020
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Constructive ownership under Sec.318
- You can have FP or FC that attributes ownership to a US individ or indivi attributes
ownership to the corporation
Example:
- If owned 100% then its automatically going to be a CFC bc it has a USSH (US pship)
- In that case no attribution applies bc already owned 100% by US pship
Alt) General Attribution Rules
- Constructive ownership could be where two people are in same family (husband + wife)
Example: You have a FC that's owned 40% by US Corp and 49% by FC + H 5% + W 6%. Is
FC a CFC?
- Who are my USSH?
- US corp is a USSH (owns 10% or more)
- FC cannot be bc its foreign
- Wife (W) only owns 6% and H owns only 5%
- But attribution rules would say wife owns what hubby does and hubby what wife so thru
attribution you have 10% owner
- So yes its a CFC!
What happens if divorce? Is it a CFC? (JOKE LMAO)
- No bc if divorced no attrib
- But if they get divorced wife will take husbands 5% and now she will be a 10% or more
owner (11% TOTAL)
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