- 18 -
change.16 A similar result presumably would occur if the
shareholder legally adopted someone during a testing period. See
sec. 318(a)(1)(B).
c. House Bill Provision Regarding Changes in Family
Status
The House version of revised section 382 provided that the
family attribution rule of section 318(a)(1) would apply “by
assuming that the family status as of the close of the testing
period was the same as the family status as of the beginning of
the testing period”. H.R. 3838, 99th Cong., 1st Sess. sec.
321(a) (1985) (provision designated as sec. 382(n)(3)(A)).
Although the report of the Committee on Ways and Means
accompanying the House bill provides no additional insight, see
H. Rept. 99-426, at 266 (1985), 1986-3 C.B. (Vol. 2) 1, 266, the
practical effect of that provision would have been to eliminate
the possibility that a change in family status during a testing
period could, in and of itself, contribute to an ownership
change.17 The conference committee, in addition to substituting
16 Note that the foregoing problem did not arise under
former sec. 382(a), since the nonshareholder spouse’s ownership
increase would not have been attributable to a purchase. See
former sec. 382(a)(1)(B)(i).
17 Returning to our marriage hypothetical, under the House
bill’s provision, the couple’s relationship on the testing date
would have been deemed to be the same as it was at the beginning
of the testing period (i.e., not married), with the result that
the nonshareholder spouse’s ownership percentage would have been
deemed to be zero throughout the testing period.
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