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Acme Corporation has 1,000 shares outstanding. Joan and Bill are married, and they each own 25...

Acme Corporation has 1,000 shares outstanding. Joan and Bill are married, and they each own 25 shares of Acme. Joan’s daughter, Shirley, also owns 25 shares of Acme. Joan is an equal partner with Jeri in the J&J partnership, and this partnership owns 50 shares of Acme. Jeri is not related to Joan or Bill. How many shares of Acme is Shirley deemed to own under the stock attribution rules?

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Answer #1

Under stock attribution rules -Shirley is deemed to own 100 shares of Acme.

  • Shares directly Owned by Shirley =25 shares
  • Shares allocated to Shirley from Bill =25 shares (family attribution)
  • Shares allocated to Shirley from Joan =50 shares
  • Total shares= 25+25+50 = 100 shares

Note -Joan owns 25 shares directly plus 25 shares are allocated to Joan from J&J i.e 50% of 50 shares through entity attribution as he is equal partner in the firm

. These 25 shares too will be allocated to Joan are allocated to Shirley through family attribution

Also as Jeri is not related to Jaon or Bill none of his shares will be allocated to Shirley.

Please upvote if the ans is helpful.thanks.

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