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which is an includible corporation, but only
if--
(B)(i) the common parent owns directly
stock meeting the requirements of paragraph
(2) in at least 1 of the other includible
corporations, and
(ii) stock meeting the requirements
of paragraph (2) in each of the includible
corporations (except the common parent) is
owned directly by 1 or more of the other
includible corporations.
(2) 80-percent voting and value test.--The
ownership of stock of any corporation meets the
requirements of this paragraph if it--
(A) possesses at least 80 percent of the
total voting power of the stock of such
corporation, and
(B) has a value equal to at least
80 percent of the total value of the stock of
such corporation.
The parties stipulated that Georgiou was the record owner of
100 percent of JAI stock. However, the "direct" ownership
requirement in section 1504(a) is not synonymous with legal or
record ownership. See Miami National Bank v. Commissioner, 67
T.C. 793 (1977).
"Direct" is not used to restrict ownership to those
situations in which the corporation has legal title to the stock.
Corporations that are in effect one business unit because of
their actual ownership have been allowed to file a consolidated
return, regardless of who is the record owner of the stock. Id.
at 798-799. See Lavenstein Corp. v. Commissioner, 25 F.2d 375,
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