[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: 26CFR1.544-4]

[Page 265]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.544-4  Options.

    The shares of stock which may be acquired by reason of an option 
shall be considered to be constructively owned by the individual having 
the option to acquire such stock. For example: If C, an individual, on 
March 1, 1955, purchases an option, or otherwise comes into possession 
of an option, to acquire 100 shares of the capital stock of M 
Corporation, such 100 shares of stock shall be considered to be 
constructively owned by C as if C had actually acquired the stock on 
that date. If C has an option on an option (or one of a series of 
options) to acquire such stock, he shall also be considered to have 
constructive ownership of the stock which may be acquired by reason of 
the option (or the series of options). Under such circumstances, C shall 
be considered to have acquired constructive ownership of the stock on 
the date he acquired his option. For the restriction on the 
applicability of the rule of this section, see paragraph (b) of Sec. 
1.544-1.

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