Ezel / IRS Rulings / 201112013

CCA 201112013: Spousal attribution can make two corporations related

Number
201112013
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Definitions and Special Rules
Topics
Corporate transactions and reorganizations
Code sections
§ 1563, § 6110
Ruling dated
January 21, 2010
Publicly released
March 25, 2011
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2011, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2011
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel advised that two corporations were related under section 1563(a)(2) on the described facts. The reasoning attributed a wife's one-percent stock ownership in one corporation to her husband under section 1563(e)(5), resulting in the husband owning 50 percent of both corporations, while the sister also owned 50 percent of both. The advice assumed that the spouses remained married and were not legally separated.

Ruling snapshot

  • Question: Are the two corporations related when a wife's stock is attributed to her husband?
  • Outcome: Advice given.
  • Key authorities: IRC §§ 1563(a)(2) and 1563(e)(5)

Full text (IRS public release)

ID: CCA-211229-10 Number: 201112013
Release Date: 3/25/2011
Office: --------------
UILC: 1563.00-00

From: ---------------------
Sent: Thursday, January 21, 2010 12:29 PM
To: -------------------
Cc: ---------------------
Subject: RE: question ---------

I think Corp C and Corp D are related under 1563(a)(2). Here is why:

Under 1563(e)(5), Brother's wife 1% stock ownership in Corp C is attributable to her husband ["Brother"]. Thus , Brother owns 50% of both Corp C and Corp D. And Sister owns 50% of Corp C and Corp D too. So 2 individuals [Brother and Sister] each equally own 50% of both Corp C and Corp D, and together Brother and Sister own more than 50% of these 2 corps as 1563(a)(2) requires.

Is that how you see it too?

I am assuming Brother and Brother's wife are still married and not separated
[see 1563(e)(5) language where it talks about a spouse if they are not legally separated or under a decree of separate maintenance, etc].

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