George Georgiou and Judith Georgiou A.K.A. Judy Georgiou, et al. - Page 20

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                               which is an includible corporation, but only                                
                                     (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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