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This Court and the U.S. Court of Appeals for the Eleventh
Circuit made a similar finding in Alumax, Inc. v. Commissioner,
165 F.3d 822, 825 (11th Cir. 1999), affg. 109 T.C. 133 (1997).
One of the issues for decision in Alumax was whether Amax
possessed at least 80 percent of the voting power of the taxpayer
as required to include the subsidiary on a consolidated return.
Sec. 1504.12 Amax owned one class of stock, and the Japanese
shareholders owned a different class of stock. The four
directors elected by Amax had two votes each. The two directors
elected by the Japanese shareholders had one vote each. Thus,
Amax controlled 80 percent of the directors’ votes. The Japanese
shareholders could veto: (1) Mergers; (2) purchase or sale of
any asset worth at least 5 percent of Alumax’s net worth; (3)
partial or complete liquidation or dissolution of Alumax; (4) the
expenditure of capital or disposition of assets worth more than
$30 million; (5) the election or dismissal of Alumax’s chief
executive officer; and (6) the making of loans to affiliated
12 Sec. 1504(a)(2) provides:
(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.
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