Nickel & Dime Corporation has 100 shares of stock outstanding owned by the following taxpayers. $\begin{array} { l }
\text { Shareholder }&\text { Shares Owned }\
\text { Mr. Nickel }&50\
\text { Mrs. Nickel (Mr. Nickel's wife) }&10\
\text { Brian (the Nickels' son) }&10\\text { Lisa (the Nickels' daughter) }&10\
\text { N\&N Partnership (Mr. Nickel is a } 20 \% \text { partner) }&10\
\text { NNN Corporation (Mr. Nickel is a } 60 \% \text { shareholder) }&10\&100
\end{array}$
Brian Nickel has decided to sell some of his shares back to the corporation in order to pay for his college tuition.Other than Brian's father, none of Brian's relatives nor the partnership or corporations are partners in N&N or shareholders in NNN.Under the constructive ownership rules of § 318, what percentage of Nickel Corporation does Brian Nickel own?

Question

Nickel & Dime Corporation has 100 shares of stock outstanding owned by the following taxpayers. $\begin{array} { l  }
\text { Shareholder }&\text { Shares Owned }\
\text { Mr. Nickel }&50\
\text { Mrs. Nickel (Mr. Nickel's wife) }&10\
\text { Brian (the Nickels' son) }&10\\text { Lisa (the Nickels' daughter) }&10\
\text { N\&N Partnership (Mr. Nickel is a } 20 \% \text { partner) }&10\
\text { NNN Corporation (Mr. Nickel is a } 60 \% \text { shareholder) }&10\&100
\end{array}$
 Brian Nickel has decided to sell some of his shares back to the corporation in order to pay for his college tuition.Other than Brian's father, none of Brian's relatives nor the partnership or corporations are partners in N&N or shareholders in NNN.Under the constructive ownership rules of § 318, what percentage of Nickel Corporation does Brian Nickel own?

Quizplus · Accepted Answer

Under § 318, Brian is considered to own his shares plus those owned by his parents. Therefore, he owns 10 (his own) + 50 (Mr. Nickel) + 10 (Mrs. Nickel) = 70 shares. Additionally, he is attributed 20% of the shares owned by N&N Partnership (10 shares), which is 2 shares, and 60% of the shares owned by NNN Corporation (10 shares), which is 6 shares. Thus, Brian constructively owns 70 + 2 + 6 = 78 shares, or 78%.

Nickel & Dime Corporation Has 100 Shares of Stock Outstanding