[Code of Federal Regulations]
[Title 26, Volume 7]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.544-2]

[Page 264-265]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.544-2  Constructive ownership by reason of indirect ownership.

    The following example illustrates the application of section 
544(a)(1), relating to constructive ownership by reason of indirect 
ownership:


[[Page 265]]


    Example. A and B, two individuals, are the exclusive and equal 
beneficiaries of a trust or estate which owns the entire capital stock 
of the M Corporation. The M Corporation in turn owns the entire capital 
stock of the N Corporation. Under such circumstances the entire capital 
stock of both the M Corporation and the N Corporation shall be 
considered as being owned equally by A and B as the individuals owning 
the beneficial interest therein.