Lansing Company is owned equally by Jennifer, her husband, Dan, and DeWitt Corporation, which is owned 50 percent by Jennifer and her sister Jane. Each of the three shareholders holds 230 shares in the company. Under the §318 stock attribution rules, how many shares of Lansing stock is DeWitt Corporation deemed to own?

Question

Quizplus · Accepted Answer

Under §318, Jennifer and Jane are deemed to own the 230 shares each held by their respective spouses (Dan and Jane's spouse), increasing DeWitt Corporation's deemed ownership to 460 shares. Additionally, Jennifer's 50 percent ownership of DeWitt Corporation is attributed to Lansing Company, increasing DeWitt's deemed ownership to 690 shares (50% of 230 equals 115 shares times 2 equals 230 shares). Therefore, DeWitt Corporation is deemed to own 690 shares of Lansing stock.

Lansing Company Is Owned Equally by Jennifer, Her Husband, Dan