ABC Corporation Is Owned 30 Percent by Andy, 30 Percent

question 45

Essay

ABC Corporation is owned 30 percent by Andy, 30 percent by Barry, 20 percent by Charlie, and 20 percent by Uptown Corporation.Uptown Corporation is owned 90 percent by Charlie and 10 percent by an unrelated party.Barry and Charlie are brothers.Answer each of the following questions about ABC under the constructive ownership rules of Section 267:​
a.What is Andy's constructive ownership percentage under Section 267?
b.What is Barry's constructive ownership percentage under Section 267?
c.What is Charlie's constructive ownership percentage under Section 267?
d.​If Andy sells property to ABC for a $6,000 loss, what amount of that loss can be recognized for tax purposes (before any annual limitations)?​

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Definitions:

Egg Cell

The female gamete or reproductive cell involved in sexual reproduction, which when fertilized by a sperm, develops into a new organism.

Sperm Cell

A cell produced by the male reproductive system for the purpose of fertilization, carrying half of the genetic information required to form a new organism.

Behavior Genetics

The field of study that examines the role of genetic and environmental factors in shaping behaviors.

Genetic and Environmental Influences

The combined effects of biological/genetic predispositions and environmental factors in shaping an individual's traits and behaviors.