Under Code § 382, if either an owner shift or equity structure shift has occurred, the test for an "ownership change" must be made.Which is true of an owner shift?

Question

Quizplus · Accepted Answer

An owner shift can occur if a purchaser not owning 5 percent acquires sufficient stock to meet the 5 percent threshold. This is known as the "5 percent threshold rule." Option A is incorrect because an owner shift can occur even if a shareholder owning less than 5 percent of stock sells or purchases shares. Option B is incorrect because the effect of a stock redemption must be taken into account in determining an ownership change.

Under Code § 382, If Either an Owner Shift or Equity