Keshia owns 500 shares in Parakeet Corporation.Keshia has a 40% beneficiary interest in her deceased grandmother's estate.The estate owns 600 shares in Parakeet Corporation.None of the other beneficiaries own stock in Parakeet.In applying the § 318 attribution rules:

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An estate is deemed to own all the stock of a beneficiary; thus,the grandmother's estate owns 1,100 shares (600 shares directly plus 500 shares indirectly).Keshia owns 740 shares: 500 shares directly and 240 shares constructively through the estate's stock ownership [i.e.,40% (beneficiary interest)F1F1F1S1F1F1F10 600 shares (estate's stock ownership)].

Keshia Owns 500 Shares in Parakeet Corporation