General. Members of Family. In General. An individual shall be considered as owning the stock, partnership interest, membership interest, or other equity interest in a company owned, directly or indirectly, by or for the individual’s: Spouse (other than a spouse who is legally separated from the individual under a decree of divorce or separate maintenance); and Children, grandchildren, and parents. Effect of Adoption. For purposes of §A(1)(a)(ii) of this regulation, a legally adopted child of an individual is treated as a child of that individual by blood. Attribution from Partnerships, Estates, Trusts, and Corporations. From Partnerships and Estates. Stock, partnership interests, membership interests, or other equity interests in a company owned, directly or indirectly, by or for a partnership or estate is considered as owned proportionately by its partners or beneficiaries. From Trusts. Stock, partnership interests, membership interests, or other equity interests in a company owned, directly or indirectly, by or for a trust (other than an employees’ trust described in section 401(a) of the Internal Revenue Code which is exempt from tax under section 501(a) of the Internal Revenue Code) is considered as owned by its beneficiaries in proportion to the actuarial interest of the beneficiaries in the trust. Stock, partnership interests, membership interests, or other equity interests in a company owned, directly or indirectly, by or for any portion of a trust of which a person is considered the owner under Subpart E of Part I of Subchapter J of the Internal Revenue Code (relating to grantors and others treated as substantial owners) is considered as owned by that person. From Corporations. If 50 percent or more in value of the stock in a corporation is owned, directly or indirectly, by or for any person, that person is considered as owning the stock, partnership interests, membership interests, or other equity interests in a company owned, directly or indirectly, by or for the corporation, in that proportion which the value of the stock which the person so owns bears to the value of all the stock in the corporation. Attribution to Partnerships, Estates, Trusts, and Corporations. To Partnerships and Estates. Stock, partnership interests, membership interests, or other equity interests in a company owned, directly or indirectly, by or for a partner or a beneficiary of an estate is considered as owned by the partnership or estate. To Trusts. Stock, partnership interests, membership interests, or other equity interests in a company owned, directly or indirectly, by or for a beneficiary of a trust (other than an employees’ trust described in section 401(a) of the Internal Revenue Code which is exempt from tax under section 501(a) of the Internal Revenue Code is considered as owned by the trust. Stock, partnership interests, membership interests, or other equity interests in a company owned, directly or indirectly, by or for a person who is considered the owner of any portion of a trust under Subpart E of Part I of Subchapter J of the Internal Revenue Code (relating to grantors and others treated as substantial owners), is considered as owned by the trust. To Corporations. If 50 percent or more in value of the stock in a corporation is owned, directly or indirectly, by or for any person, that corporation shall be considered as owning the stock, partnership interests, membership interests, or other equity interests in a company owned, directly or indirectly, by or for the person. Options. If a person has an option to acquire stock, that stock is considered as owned by that person. An option to acquire an option, and each one of a series of these options, is considered as an option to acquire the stock. Operating Rules. In General. Except as provided in §B(2) and (3) of this regulation, stock, partnership interests, membership interests, or other equity interests in a company constructively owned by a person by reason of the application of §A(1), (2), or (3) of this regulation is, for purposes of applying §A(1), (2), and (3) of this regulation, considered as actually owned by the person. Members of Family. Stock, partnership interests, membership interests, or other equity interests in a company constructively owned by an individual by reason of the application of §A(1) of this regulation is not considered as owned by the individual for purposes of again applying §A(1) of this regulation in order to make another the constructive owner of the stock. Partnerships, Estates, Trusts, and Corporations. Stock, partnership interests, membership interests, or other equity interests in a company constructively owned by a partnership, estate, trust, or corporation by reason of the application of §A(3) of this regulation is not considered as owned by it for purposes of applying §A(3) of this regulation in order to make another the constructive owner of the stock. S Corporation treated as Partnership. For purposes of this section: An S corporation is treated as a partnership; and Any shareholder of the S corporation is treated as a partner of the partnership, except that this does not apply for purposes of determining whether stock in the S corporation is constructively owned by any person.