Primco Management Company, Alfred Dreyfus Goldman Revocable Living Trust, Alfred D. Goldman, Fiduciary, Tax Matters Person - Page 7

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          during the years in issue were two grantor trusts.  Petitioner              
          reasons that, by virtue of the general attributes of a grantor              
          trust, as well as the particular treatment afforded a grantor               
          trust as a permitted shareholder of an S corporation, the deemed            
          owners of the trusts should be considered Primco's shareholders             
          for purposes of applying section 301.6241-1T(c)(2), Temporary               
          Proced. & Admin. Regs.  In this regard, petitioner relies                   
          primarily upon section 1361(c)(2), which provides that a grantor            
          trust may be a shareholder of an S corporation and that the                 
          deemed owner of the trust will be treated as the shareholder.6              

               6  Sec. 1361(c)(2)(B)(i) provides in pertinent part:                   
               (c) Special Rules for Applying Subsection (b).--                       
          *    *    *    *    *    *    *                                             
                    (2) Certain trusts permitted as shareholders.--                   
                         (A) In general.--For purposes of subsection                  
                    (b)(1)(B), the following trusts may be                            
                              (i) A trust all of which is treated                     
               (under subpart E of part I of subchapter J of                          
                         this chapter) as owned by an individual who                  
               is a citizen or resident of the United                                 
                           *    *    *    *    *    *    *                            
                         (B) Treatment as shareholders.--For purposes                 
                    of subsection (b)(1)--                                            
                              (i) In the case of a trust described in                 
                         clause (i) of subparagraph (A), the deemed                   
               owner shall be treated as the shareholder.                             

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