[Code of Federal Regulations]
[Title 26, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.269-1]

[Page 589]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.269-1  Meaning and use of terms.

    As used in section 269 and Sec. Sec. 1.269-2 through 1.269-7:
    (a) Allowance. The term allowance refers to anything in the internal 
revenue laws which has the effect of diminishing tax liability. The term 
includes, among other things, a deduction, a credit, an adjustment, an 
exemption, or an exclusion.
    (b) Evasion or avoidance. The phrase evasion or avoidance is not 
limited to cases involving criminal penalties, or civil penalties for 
fraud.
    (c) Control. The term control means the ownership of stock 
possessing at least 50 percent of the total combined voting power of all 
classes of stock entitled to vote, or at least 50 percent of the total 
value of shares of all classes of stock of the corporation. For control 
to be ``acquired on or after October 8, 1940'', it is not necessary that 
all of such stock be acquired on or after October 8, 1940. Thus, if A, 
on October 7, 1940, and at all times thereafter, owns 40 percent of the 
stock of X Corporation and acquires on October 8, 1940, an additional 10 
percent of such stock, an acquisition within the meaning of such phrase 
is made by A on October 8, 1940. Similarly, if B, on October 7, 1940, 
owns certain assets and transfers on October 8, 1940, such assets to a 
newly organized Y Corporation in exchange for all the stock of Y 
Corporation, an acquisition within the meaning of such phrase is made by 
B on October 8, 1940. If, under the facts stated in the preceding 
sentence, B is a corporation, all of whose stock is owned by Z 
Corporation, then an acquisition within the meaning of such phrase is 
also made by Z Corporation on October 8, 1940, as well as by the 
shareholders of Z Corporation taken as a group on such date, and by any 
of such shareholders if such shareholders as a group own 50 percent of 
the stock of Z on such date.
    (d) Person. The term person includes an individual, a trust, an 
estate, a partnership, an association, a company or a corporation.

[T.D. 6595, 27 FR 3596, Apr. 14, 1962, as amended by T.D. 8388, 57 FR 
345, Jan. 6, 1992]