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What is constructive ownership of stock?

Constructive ownership basically addresses the concept that you are so closely related to the real owner that the IRS says you should be treated like an owner. The IRS lists out several scenarios that could indicate constructive ownership:

Scenario #1: The stock owned, directly or indirectly, by or for a corporation, partnership, estate, or trust shall be considered as being owned proportionately by or for its shareholders, partners, or beneficiaries;

Scenario #2: An individual shall be considered as owning the stock if it is owned, directly, or indirectly, by their family;

Scenario #3: An individual owning any stock in a corporation shall be considered as owning the stock if it is owned directly or indirectly by their partner;

Scenario #4: The family of an individual shall include only his brothers and sisters, spouse, ancestors, and lineal descendants;

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