- quote -

Thank you,
Not only did this define what I was looking for but it also
pointed me in the right direction for a continued search of
the topic. Although I was looking for 'attribution rules'
Congress has defined what I really wanted as 'constructive
ownership of stock'. Again, thank you,

Patrick Fleming, EA

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Patrick Fleming EA wrote:
- quote -

See IRC Sec. 267. I think this is the one used for S Corps.

--

Alan
http://taxtopics.net

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Phoebe Roberts, EA wrote:
- quote -

Except when they are owners/shareholders.
The question I have is what are the rules that determine
whether and when you are considered an owner/shareholder.
There are ownership attribution rules that I can find for
all other passthrough (and some not passthrough depending on
what you are looking for) entities. What are the ownership
attribution rules to determine whether you are an owner of
an S-Corp?

eg:
A owns 25% of all outstanding shares.
B owns 37.5% of all outstanding shares.
C owns 37.5% of all outstanding shares.
A and B are married (to each other)
A's mother also works for the corporation (although she has
yet to receive commissions) as an 'independent agent'. Is
she truly independent, or, as I suspect but have yet to
prove, is she considered a shareholder due to attribution
rules? And if so, where the heck are these specific rules?

Patrick Fleming, EA

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Patrick Fleming EA wrote:

- quote -

Licensed real estate agents are statutory nonemployees, and
receive a 1099-MISC, I believe.

Phoebe

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I don't post here very regularly, but I have a question that
I *know* I have read the answer to somewhere but can't find
it now. Can someone point me to attribution rules regarding
ownership of stock in an S Corp? Most specifically, I need
to be able to point to regs for a small corporation with
lots of related non-stockholders. The entity in question is
a real estate agency with non-stockholder related parties as
commissioned sales persons. Normally the agents get a
1099-Misc as is the nature of the business. How do the
commissioned agents who are also family members get paid and
which reporting document is required?

Based on something I read somewhere, but can't point to now,
2% or more owners as well as individuals with a deemed 2% or
more ownership get W-2s and all compensation is reported on
line 7(Compensation of Officers) of the 1120S. I have
searched through the actual code online at
http://uscode.house.gov , the IRS site, and my own reference
materials without satisfactory results.

Thanks for any and all help,

Patrick Fleming, EA

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