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the ability to vote without restriction) more than 10 percent of
Avdel’s voting power. For the purpose of subpart F, a “United
States person” is defined in section 957(c), and the voting trust
is a domestic trust that is included in that definition.3 Sec.
7701(a)(30). Given the fact that Avdel is a CFC and that the
voting trust is a U.S. person possessing more than 10 percent of
Avdel’s voting power, we conclude that the voting trust is a U.S.
shareholder under section 951(b).
As discussed above, section 951(a) requires that a taxpayer
who is a U.S. shareholder include in its gross income a pro rata
share of the subpart F income attributable to its shareholding in
a CFC. Here, prima facie, the voting trust must include a pro
rata share of Avdel’s subpart F income in its gross income.
Subpart E, however, provides an exception to the general rule
that trusts are taxable on their income. Under these provisions,
“when a grantor who has certain powers in respect of trust
property that are tantamount to dominion and control over such
property, the Code ‘looks through’ the trust form and deems such
grantor or other person to be the owner of the trust property and
attributes the trust income directly to such person.” Estate of
O’Connor v. Commissioner, 69 T.C. 165, 178 (1977).
3 Petitioner does not argue that the voting trust is
properly characterized as a foreign trust.
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