# 26 U.S.C. § 958: Rules for determining stock ownership Source: OLRC release point 119-134 . Cite pinpoints as 26 U.S.C. § 958(a)(1). ## § 958(a) Direct and indirect ownership **§ 958(a)(1) General rule.** For purposes of this subpart (other than section 960), stock owned means— **§ 958(a)(1)(A)** stock owned directly, and **§ 958(a)(1)(B)** stock owned with the application of paragraph (2). **§ 958(a)(2) Stock ownership through foreign entities.** For purposes of subparagraph (B) of paragraph (1), stock owned, directly or indirectly, by or for a foreign corporation, foreign partnership, or foreign trust or foreign estate (within the meaning of section 7701(a)(31)) shall be considered as being owned proportionately by its shareholders, partners, or beneficiaries. Stock considered to be owned by a person by reason of the application of the preceding sentence shall, for purposes of applying such sentence, be treated as actually owned by such person. **§ 958(a)(3) Special rule for mutual insurance companies.** For purposes of applying paragraph (1) in the case of a foreign mutual insurance company, the term “stock” shall include any certificate entitling the holder to voting power in the corporation. ## § 958(b) Constructive ownership For purposes of sections 951(b), 954(d)(3), 956(c)(2), and 957, section 318(a) (relating to constructive ownership of stock) shall apply to the extent that the effect is to treat any United States person as a United States shareholder within the meaning of section 951(b), to treat a person as a related person within the meaning of section 954(d)(3), to treat the stock of a domestic corporation as owned by a United States shareholder of the controlled foreign corporation for purposes of section 956(c)(2), or to treat a foreign corporation as a controlled foreign corporation under section 957, except that— **§ 958(b)(1)** In applying paragraph (1)(A) of section 318(a), stock owned by a nonresident alien individual (other than a foreign trust or foreign estate) shall not be considered as owned by a citizen or by a resident alien individual. **§ 958(b)(2)** In applying subparagraphs (A), (B), and (C) of section 318(a)(2), if a partnership, estate, trust, or corporation owns, directly or indirectly, more than 50 percent of the total combined voting power of all classes of stock entitled to vote of a corporation, it shall be considered as owning all the stock entitled to vote. **§ 958(b)(3)** In applying subparagraph (C) of section 318(a)(2), the phrase “10 percent” shall be substituted for the phrase “50 percent” used in subparagraph (C). **§ 958(b)(4)** Subparagraphs (A), (B), and (C) of section 318(a)(3) shall not be applied so as to consider a United States person as owning stock which is owned by a person who is not a United States person. Paragraphs (1) and (4) shall not apply for purposes of section 956(c)(2) to treat stock of a domestic corporation as not owned by a United States shareholder. ## Regulations - [Treas. Reg. § 1.958-1](/26/reg/1.958-1.md): Direct and indirect ownership of stock. (interprets § 958) - [Treas. Reg. § 1.958-2](/26/reg/1.958-2.md): Constructive ownership of stock. (interprets § 958) ## Final rules - [87 FR 3648](https://www.federalregister.gov/documents/2022/01/25/2022-00066/guidance-under-section-958-on-determining-stock-ownership) (2022): Guidance Under Section 958 on Determining Stock Ownership - [85 FR 59428](https://www.federalregister.gov/documents/2020/09/22/2020-17549/ownership-attribution-under-section-958-including-for-purposes-of-determining-status-as-controlled) (2020): Ownership Attribution Under Section 958 Including for Purposes of Determining Status as Controlled Foreign Corporation or United States Shareholder - [84 FR 63802](https://www.federalregister.gov/documents/2019/11/19/2019-24985/ownership-attribution-for-purposes-of-determining-whether-a-person-is-related-to-a-controlled) (2019): Ownership Attribution for Purposes of Determining Whether a Person Is Related to a Controlled Foreign Corporation; Rents Derived in the Active Conduct of a Trade or Business - [66 FR 37886](https://www.federalregister.gov/documents/2001/07/20/01-17971/foreign-trusts-that-have-us-beneficiaries) (2001): Foreign Trusts That Have U.S. Beneficiaries ## Leading cases - [Stanford v. Commissioner, 152 F.3d 450 (5th Cir. 1998)](https://www.courtlistener.com/opinion/15677/stanford-v-commissioner/) - [Textron Inc. v. Commissioner, 117 T.C. 67 (2001)](https://www.courtlistener.com/opinion/4696598/textron-inc-v-commr/) ## Proposed regulations (not in force) - [Prop. Treas. Reg. § 1.958-1](/26/prop/1.958-1_2022-00067.md): Direct and indirect ownership of stock. (REG-101828-19, proposed 2022-01-25) ## Connections Cites: § 318 Constructive ownership of stock; § 951 Amounts included in gross income of United States shareholders; § 954 Foreign base company income; § 956 Investment of earnings in United States property; § 957 Controlled foreign corporations; United States persons; § 960 Deemed paid credit for subpart F inclusions; § 7701 Definitions Cited by: § 163 Interest; § 267 Losses, expenses, and interest with respect to transactions between related taxpayers; § 269B Stapled entities; § 304 Redemption through use of related corporations; § 318 Constructive ownership of stock; § 545 Undistributed personal holding company income; § 864 Definitions and special rules; § 877 Expatriation to avoid tax; § 898 Taxable year of certain foreign corporations; § 904 Limitation on credit; § 934 Limitation on reduction in income tax liability incurred to the Virgin Islands; § 951 Amounts included in gross income of United States shareholders; § 951A Net CFC tested income included in gross income of United States shareholders; § 951B Amounts included in gross income of foreign controlled United States shareholders; § 953 Insurance income; § 954 Foreign base company income; § 956 Investment of earnings in United States property; § 957 Controlled foreign corporations; United States persons; § 959 Exclusion from gross income of previously taxed earnings and profits; § 961 Adjustments to basis of stock in controlled foreign corporations and of other property; § 964 Miscellaneous provisions; § 1248 Gain from certain sales or exchanges of stock in certain foreign corporations; § 1249 Gain from certain sales or exchanges of patents, etc., to foreign corporations; § 1297 Passive foreign investment company; § 2107 Expatriation to avoid tax; § 2501 Imposition of tax; § 6655 Failure by corporation to pay estimated income tax ## Amendments - 1962-10-16: [Pub. L. 87-834](/26/act/87-834.md), 76 Stat. 1018 - 1964-08-31: [Pub. L. 88-554](/26/act/88-554.md), 78 Stat. 763 - 1976-10-04: [Pub. L. 94-455](/26/act/94-455.md), 90 Stat. 1619 - 1996-08-20: [Pub. L. 104-188](/26/act/104-188.md), 110 Stat. 1876 - 2017-12-22: [Pub. L. 115-97](/26/act/115-97.md), 131 Stat. 2217 - 2025-07-04: [Pub. L. 119-21](/26/act/119-21.md), 139 Stat. 209