Kite Corporation has 1,000 shares of stock outstanding. Kent owns 250 shares, Kent's father owns 150 shares, Kent's brother owns 250 shares, and Kent's son owns 50 shares. Plover Corporation owns the other 300 shares in Kite Corporation. Kent owns 60% of the stock in Plover Corporation. Applying the § 318 stock attribution rules, how many shares does Kent own in Kite Corporation?

Question

Quizplus · Accepted Answer

According to the § 318 stock attribution rules, stock owned by family members and certain entities is attributed to the taxpayer for the purpose of determining stock ownership.

Applying the rules, Kent is considered to own the following additional shares in Kite Corporation:

- Shares owned by Kent's father: 150 
- Shares owned by Kent's brother: 250 
- Shares owned by Kent's son: 50 
- Shares owned by Plover Corporation (where Kent owns 60%): 180

Therefore, Kent's total ownership in Kite Corporation is:

250 (original shares) + 150 + 250 + 50 + 180 = 880

Therefore, the correct answer is D) 630.

Kite Corporation Has 1,000 Shares of Stock Outstanding