# Treas. Reg. § 1.544-2: Constructive ownership by reason of indirect ownership.

Source: eCFR as of 2026-10-19 <https://www.ecfr.gov/current/title-26/section-1.544-2>. Interprets 26 U.S.C. § 544.

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.