Reg. § 1.1502-34 Special aggregate stock ownership rules.
(a) Determination of stock ownership For purposes of the consolidated return regulations, in determining the stock ownership of a member of a group in another corporation (issuing corporation) for purposes of determining the application of section , , , , or in a consolidated return year, stock in the issuing corporation owned by all other members of the group is included. For the determination of whether a member of the group is an 80-percent distributee, see section (providing that, for purposes of section , the determination of whether any corporation is an 80-percent distributee is made without regard to any consolidated return regulation).
(b) Example regarding liquidation of member The following example illustrates the stock ownership aggregation rule set forth in of this section.
(1) Facts P wholly owns A, B, and C, each of which is a member of the P group. A, B, and C each owns 331⁄3 percent of the stock of D. D liquidates in a transaction purported to qualify under section .
(2) Analysis For purposes of determining satisfaction of the 80-percent stock ownership requirement under section , under the stock ownership aggregation rule set forth in of this section: A is treated as owning all of the D stock owned by B and C; B is treated as owning all of the D stock owned by A and C; and C is treated as owning all of the D stock owned by A and B. Therefore, each of A, B, and C is treated as owning 100 percent of the stock of D and thus meeting the 80-percent stock ownership requirement for purposes of section . However, none of A, B, or C is treated as an 80-percent distributee for purposes of section . See section . Therefore, section does not apply.
[T.D. 10018, 89 FR 106871, Dec. 30, 2024]