Court Opinion

ID: 4480165
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:14:06.402664+00
Date Added: 2024-06-11T08:48:28.710280
License: Public Domain

Hoyt, J., concurring: While I agree with much that is stated in the Court’s opinion and with the result reached by the majority, I think their construction of section 333 (a)(2) is unduly narrow. Reading sections 331(a) (2), 333(a) (2), and 333(a) (4) together, I would attribute ownership of family-held stock to one family member, not only in the event that the group of U.S. individuals that controls consists of more than five and the result would be to reduce the group to five, but also to determine whether or not five or fewer resident or citizen stockholders together own, directly or indirectly, 50 per centum in value of the foreign corporation’s outstanding stock. I believe that if the resident-citizen brother here were himself a stockholder he would 'be an individual comprising a “United States group” of fewer than five stockholders owning more than 50 per centum of the foreign corporation’s stock. This is so because under section 333(a) (2) “For the purpose of determining whether a foreign corporation is a foreign personal holding company, insofar as such determination is tosed on stocJc ownership under section 331(a) (#)” (emphasis supplied) , he should be considered as owning the stock owned directly or indirectly by 'his sisters even though they are nonresidents. In other words, to paraphrase the concluding paragraph of the Court’s opinion, I would instead conclude as follows: We construe section 331 as defining a foreign personal holding company as a foreign corporation with the requisite undistributed income that is controlled by a U.S. group made up of five or fewer U.S. citizens or residents. If the group of U.S. individuals that controls is more than five, then section 333(a) (2) is applicable to treat family-owned shares as one unit so as to reduce the group to five. Section 333(a)(2) is also applicable to determine whether or not there is control in a “United States group” of five or fewer individuals owning stock, directly or indirectly, in a foreign corporation. Any application of section 333 (a) (2) is, of course, specifically limited by section 333 (a) (4) to a result which has the effect of making the foreign corporation a foreign personal holding company. Bruce, TraiN, and Fat, JJ., agree with this concurring opinion.