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family aggregation for family attribution, dropped the provision
in the House bill regarding changes in family status.18
d. Observations
In the context of the parties’ arguments in this case, the
conference committee’s excision of the House bill provision
regarding changes in family status is somewhat puzzling.
Specifically, under each party’s interpretation of section
382(l)(3)(A)(i), the family aggregation rule adopted by the
conferees would produce the same “artificial” ownership increases
that the House bill provision eliminated in the context of
attribution. In terms of our marriage hypothetical, the addition
of the shareholder spouse to the nonshareholder spouse’s family
unit during the testing period would increase the ownership
percentage of that family unit by 100 percentage points during
that period. If, however, the family aggregation rule applies
solely from the perspective of shareholders of the loss
corporation, there would be no separate family unit headed by the
nonshareholder spouse in our hypothetical and, consequently, (1)
no increase in ownership attributable to the marriage, and (2) no
need for the remedial provision contained in the House bill.
Under that interpretation of the family aggregation rule, the
18 The Senate version of the bill contained no such
provision, providing instead for the application of the family
attribution rules of sec. 318 without modification. H.R. 3838,
99th Cong., 2d Sess. sec. 621(a) (1986) (provision designated as
sec. 382(k)(3)(A)).
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