26 CFR § 1.544-2
Constructive ownership by reason of indirect ownership
June 25, 2020
The following example illustrates the application of section 544(a)(1), relating to constructive ownership by reason of indirect ownership:
Example. A and B, two individuals, are the exclusive and equal beneficiaries of a trust or estate which owns the entire capital stock of the M Corporation. The M Corporation in turn owns the entire capital stock of the N Corporation. Under such circumstances the entire capital stock of both the M Corporation and the N Corporation shall be considered as being owned equally by A and B as the individuals owning the beneficial interest therein.