Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 59-43

1959-1 C.B. 146

Sec. 267
Sec. 542
Sec. 544
Sec. 552

Full Text

Rev. Rul. 59-43

In determining whether a corporation is a personal holding company or a foreign personal holding company, insofar as such determination is based on the stock ownership requirement of section 542(a)(2) of the Internal Revenue Code of 1954, an individual shall be considered as owning the stock owned, directly or indirectly, by or for his family, which, under section 544(a)(2) of the Code, includes only his brothers and sisters (whether by the whole or half blood), spouse, ancestors, and lineal descendants. Under section 554 of the Code, the rules provided in section 544 of the Code, with regard to the stock ownership requirement, are also applicable in determining whether a foreign corporation is a foreign personal holding company. Held , stock in a domestic or foreign corporation, owned by a relative other than one specified in section 544(a)(2) of the Code, such as an aunt or an uncle of an individual stockholder in such corporation, may not be considered as owned by such individual stockholder under the constructive stock ownership rule in determining the personal holding company status of a foreign or domestic corporation. See Graves Brothers Company v. Commissioner , 17 T.C. 1499, acquiescence, C.B. 1953-1, 4. This principle is equally applicable in determining whether a foreign corporation satisfies the stock ownership requirement of a foreign personal holding company within the meaning of section 552(a)(2) of the Code, where the facts are otherwise identical.