4 Corporate Distributions: Stock Redemptions and Partial Liquidations Solutions to Tax Research Problems TAX RESEARCH PROBLEMS 4-33 Ms. J, an individual, owns 74 percent of the shares of the stock of D Corporation as computed below. Ownership Shares Direct...
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4 Corporate Distributions: Stock Redemptions and Partial Liquidations Solutions to Tax Research Problems TAX RESEARCH PROBLEMS 4-33 Ms. J, an individual, owns 74 percent of the shares of the stock of D Corporation as computed below. Ownership Shares Direct 60 Indirect: Partnership X (20% 20) 4 Partnership Y (70% 20) 14 Total 78/100 ¼ 78% Under § 318(a)(2)(B), stock owned by a partnership is deemed to be owned proportionately by its partners regardless of the partners’ interest in the partnership. (See p. 4-8.) 5- Partnership X owns 94 percent of the stock of D Corporation. Under the owner to entity attribution rules of § 318(a)(3), stock owned by those having an interest in an entity is generally attributed in full to the entity. In addition, under § 318(a)(5), the stock owned by partnership Y that is attributable to J under § 318(a)(2) (70% 20 ¼ 14) is deemed to be actually owned by J and thus may be reattributed to Partnership X under § 318(a)(3). Note that § 318(a)(5) permits attrib
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