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B. Determining Stock Ownership for Purposes of Section 382
Section 382(l)(3)(A) provides that, with certain exceptions,
the constructive ownership rules of section 318 apply in
determining stock ownership. Under the first of those
exceptions, set forth in section 382(l)(3)(A)(i), the family
attribution rules of section 318(a)(1) and (5)(B) do not apply;5
instead, an individual and all members of his family described in
section 318(a)(1) (spouse, children, grandchildren, and parents)
are treated as one individual.
C. Regulations
The family aggregation rule of section 382(l)(3)(A)(i) is
further addressed in section 1.382-2T(h)(6), Temporary Income Tax
Regs., 52 Fed. Reg. 29686 (Aug. 11, 1987). Paragraph (h)(6)(ii)
of that section repeats the general rule that, for purposes of
section 382, an individual and all members of his family
described in section 318(a)(1) are treated as one individual.6
5 Sec. 318(a)(1) provides that an individual is treated as
owning the stock owned by his spouse, his children, his
grandchildren, and his parents. Sec. 318(a)(5)(B) provides that
stock constructively owned by an individual by operation of the
family attribution rule of sec. 318(a)(1) is not reattributed
from such individual to other individuals under that rule. For
example, stock constructively owned by an individual through
attribution from his spouse under sec. 318(a)(1) is not
reattributed from that individual to his parent under that
provision.
6 The family aggregation rule does not apply, however, to
any family member who, without regard to aggregation, would not
be a 5-percent shareholder. Sec. 1.382-2T(h)(6)(iii), Temporary
(continued...)
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