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PUBLIC LAW 88-554-AUG. 31, 1964
[78 STAT.
mittee on Ways and Means of the House of Representatives at the earliest practicable date, but not later than June 30, 1965. S^^- ^- (^) Section 318(a) of the Internal Revenue Code of 1954 (relating to constructive ownership of stock) is amended by striking out paragraphs (2), (3), and (4) and inserting in lieu thereof the following: " (2) ATTRIBUTIOI^ FROM PARTNERSHIPS, ESTATES, TRUSTS, AND CORPORATIONS.— " (A) FROM PARTNERSHIPS AND ESTATES.—Stock owned,
directly or indirectly, by or for a partnership or estate shall be considered as owned proportionately by its partners or beneficiaries. " (B) FROM TRUSTS.—
^6 us^c 4of' 26 USC 501.'
678^ ^^^ ^^^'
" (i) Stock owned, directly or indirectly, by or for a trust (other than an employees' trust described in sec^^^^ 401(a) which is exempt from tax under section 501 (a)) shall be considered as owned by its beneficiaries in proportion to the actuarial interest of such beneficiaries in such trust. "(ii) Stock owned, directly or indirectly, by or for any portion of a trust of which a person is considered ^^^^ owner under subpart E of part I of subchapter J (relating to grantors and others treated as substantial owners) shall be considered as owned by such person. " (C) FROM CORPORATIONS.—If 50 percent or more in value of the stock in a corporation is owned, directly or indirectly, by or for any person, such person shall be considered as owning the stock owned, directly or indirectly, by or for such corporation, in that proportion which the value of the stock which such person so owns bears to the value of all the stock in such corporation. " (3) ATTRIBUTION TO PARTNERSHIPS, ESTATES, TRUSTS, AND CORPORATIONS.— " (A) TO PARTNERSHIPS AND ESTATES.—Stock owned, di-
rectly or indirectly, by or for a partner o r a beneficiary of an estate shall be considered as owned by the partnership or estate. "(B)
To TRUSTS.—
" (i) Stock owned, directly or indirectly, by or for a beneficiary of a trust (other than an employees' trust described in section 401(a) which is exempt from tax under section 501(a)) shall be considered as owned b j the trust, unless such beneficiary's interest in the trust is a remote contingent interest. For purposes of this clause, a contingent interest of a beneficiary in a trust shall be considered remote if, under the maximum exercise of discretion by the trustee in favor of such beneficiary, the value of such interest, computed actuarially, is 5 percent or less of the value of the trust property. "(ii) Stock owned, directly or indirectly, by or for a person who is considered the owner of any portion of a trust under subpart E of part I of subchapter J (relating to grantors and others treated as substantial owners) shall be considered as owned by the trust. " (C) To CORPORATIONS.—If 50 percent or more in value of the stock in a corporation is owned, directly or indirectly, by or for any person, such corporation shall be considered as owning the stock owned, directly or indirectly, by or for such person.
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