Homework Answers
Answer is A. 54%
| Shares | |||
| Outstanding | Percentage | Owned | |
| Direct Ownership | |||
| R | 10 | 100% | 10 |
| Indirect Ownership | |||
| R's wife | 10 | 100% | 10 |
| R's son | 10 | 100% | 10 |
| R's Mother | 10 | 100% | 10 |
| R's Brother | 10 | 0% | 0 |
| R's Uncle | 10 | 0% | 0 |
| Partneship X | 10 | 10% | 1 |
| Corporation A | 10 | 40% | 0 |
| Corporation B | 10 | 50% | 5 |
| Corporation C | 10 | 80% | 8 |
| Total Indirect Ownership | 44 | ||
| Constructive Ownership (TOTAL) | 54 | ||
| Percentage of stock R considerd to own is 54% | |||
| Stock attribution rules applied here | |
| Deemed or constructive ownership | |
| Family | An individual is deemed to own the stock owned by his or her spouse, children, grandchildren and parents (not siblings or grand parents) |
| Partnership | A partner is deemed to own the stock owned by the partnership to the extent of the poartners proportionate interest in partnership |
| Stock owned by a partner is deemed to be owned fully by a Partnership | |
| Corporation | Stock owned by a corporation is deemed to be owned proportionately by any shareholder owning 50% or more of the corporation stock |
| Stock owned by a Shareholder who owns 50% or more of corporation is deemed to be owned in full by the corporation |
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