Blackbird Corporation owns 400 shares in Hawk Corporation.Luisa owns 600 shares in Hawk Corporation and 800 shares in Blackbird Corporation.The 800 shares represent an 80% interest in Blackbird.In applying the § 318 attribution rules:

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Blackbird owns 1,000 shares in total.In addition to the 400 shares it owns directly,Blackbird is deemed to own all of Luisa's 600 shares (as she is a 50% or greater shareholder of Blackbird).Luisa,on the other hand,owns 920 shares in Hawk.She owns 600 shares directly and 320 of Blackbird's shares [400 (shares owned by Blackbird)F1F1F1S1F1F1F10 80% (Luisa's interest in Blackbird)].

Blackbird Corporation Owns 400 Shares in Hawk Corporation