Question 1

What are tax attribution rules?

Accepted Answer

Attribution rules (Sections 267 and 318) determine constructive ownership by attributing stock owned by family members, partnerships, corporations, and trusts to you. This determines if you are a related party.

Question 2

Who is considered a family member for attribution?

Accepted Answer

For tax attribution, family includes your spouse, children, grandchildren, parents, and grandparents. Siblings are NOT included in attribution rules.

Question 3

What happens if I sell to a related party?

Accepted Answer

Losses on sales to related parties are disallowed under Section 267. The buyer's basis becomes their purchase price. The loss is deferred until they sell to an unrelated party.

Question 4

What is the 50% threshold?

Accepted Answer

If you have 50% or more constructive ownership (direct + attributed), you are a related party. Transactions with the entity or other owners may trigger loss disallowance or other restrictions.

Source	Ownership (%)
Direct Ownership	25.0%
Spouse Attribution	50.0%
Children Attribution	0.0%
Parents Attribution	0.0%
Partnership Attribution	0.0%
Corporate Attribution	0.0%
Trust Attribution	0.0%
Total Constructive	75.0%

Tax Attribution Rules Calculator

Family Member Ownership

Entity Attribution (%)

Attribution Breakdown

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Attribution Rules Key Points