TAX 9869 Lecture Notes - Lecture 51: Foreign Tax Credit, Controlled Foreign Corporation, Fiction Collective Two
Document Summary
Stock attribution rules apply to determine the 10% shareholder and cfc status. 3) 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. Corporation dc owns 20% of foreign corporation fc1, which in turn owns. Dc is deemed to own 10% of fc2 (20% of 50%). Stock attribution: (continued: the constructive ownership rules are similar to sec. 318 attribution rules with some modifications: family attribution: taxpayer"s spouse, children, grandchildren and parents. A and b are u. s. persons each owning 10% of foreign corporation x. A and b, therefore, each own 10% directly and 10% constructively, for a total of 20% each. Their 4 grandchildren who are non-resident aliens each own 20% of foreign corporation x.
