78 STAT.]
PUBLIC LAW 88-554-AUG. 31, 1964
763
"(4) OPTIONS.—If any person has an option to acquire stock, such stock shall be considered as owned by such person. For purposes of this paragraph, an option to acquire such an option, and each one of a series of such options, shall be considered as an option to acquire such stock. " (5) OPERATING RULES.—
" (A) IN GENERAL.—Except as provided in subparagraphs (B) and (C), stock constructively owned by a person by reason of the application of paragraph (1), (2), (3), or (4), shall, for purposes of applying paragraphs (1), (2), (3), and (4), be considered as actually owned by such person. " (B) MEMBERS OF FAMILY.—Stock constructively owned by an individual by reason of the application of paragraph (1) shall not be considered as owned by him for purposes of again applying paragraph (1) in order to make another the constructive owner of such stock. " (C) PARTNERSHIPS, ESTATES, TRUSTS, AND CORPORATIONS.—
Stock constructively owned by a partnership, estate, trust, or corporation by reason of the application of paragraph (3) shall not be considered as owned by it for purposes of applying paragraph (2) in order to make another the constructive owner of such stock. "(D)
OPTION RULE I N LIEU or FAMILY RULE.—For purposes
of this paragraph, if stock may be considered as owned by an individual under paragraph (1) or (4), it shall be considered as owned by him under paragraph (4)." (b)(1) Section 304(b)(1) (relating to rule, for determinations under section 302(b)) and section 304(c)(2) (relating to constructive ownership) of the Internal Revenue Code of 1954 are amended by striking out "section 318(a)(2)(C) " and inserting in lieu thereof "sections 318(a)(2)(C) and 318 (a)(3)(C) ". (2) Section 318(b) of such Code (relating to cross-references) is amended by striking out "and" at the end of p a r a ^ a p h (6), by renumbering paragraph (7) as paragraph (8), and by inserting after paragraph (6) the following new paragraph:
26'us<f*304!" ^^ "^"^ ^'^•
"O) section 958(b) (relating to constructive ownership rules with respect to controlled foreign corporations); and"
(3) Section 382(a)(3) of such Code (relating to attribution of ownership) is amended by striking out "section 318(a)(2)(C) " and inserting in lieu thereof "sections 318(a)(2)(C) and 318(a)(3)(C) ". (4) Section 856(d) of such Code (relating to rents from real property defined) is amended by striking out "section 318(a)(2) " in the last sentence and inserting in lieu thereof "sections 318(a)(2) and 318 (a)(3)". (5) Section 958(b) of such Code (relating to constructive ownership) is amended— (A) by striking out "the first sentence of subparagraphs (A) and (B), and in applying clause (i) of subparagraph (C), " in paragraph (2) and inserting in lieu thereof "subparagraphs (A), (B), and (C) "; (B) by striking out paragraph (3); (C) by striking out "(4) I n applying clause (i) of subparagraph (C) " and inserting m lieu thereof "(3) I n applying subparagraph (C) "; and (D) by striking out "(5) The second sentence of subparagraphs (A) and (B), and clause (ii) of subparagraph ((J), of section 3 1 8 (a)(2) " and inserting in lieu thereof "^(4) Subparagraphs (A), (B), and (C) of section 318(a)(3)".
^e use 382. 74 Stat. 1004. 26 USC 856.
76 Stat. 1018. 26 USC 958.
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