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the aggregation rule of section 382(l)(3)(A)(i) to apply solely
from the perspective of individuals who are shareholders (as
determined under the attribution rules of section 382(l)(3)(A))
of the loss corporation.14 In practical terms, our conclusion
dictates that we sustain respondent’s determination in this case,
even though we disagree with his interpretation of the statute.
2. 1986 Act Revisions to Section 382
a. Relevant Fundamental Changes to the Statute
Among other things, section 621(a) of the 1986 Act replaced
the “purchase” rules of former section 382(a) with the concept of
the “owner shift”, defined broadly to include any change in the
respective ownership of the stock of a corporation. Sec.
382(g)(2)(A). The occurrence of an owner shift involving a 5-
percent shareholder, see sec. 382(g)(2)(B), (k)(7), is one of two
occasions for opening the corporation’s stock transfer books to
determine whether the aggregate percentage ownership interest of
one or more such shareholders has increased by more than 50
percentage points within the relevant “lookback” (testing)
period.15 See sec. 382(g)(1), (i). While the owner shift
14 In other words, composite shareholders are to be
constructed only around individuals who directly or indirectly
(through an entity or by means of an option) own shares of the
loss corporation.
15 The other such occasion is the occurrence of an equity
structure shift (in general, most corporate reorganizations).
See sec. 382(g)(1), (3).
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