Common use of Stock treated as held by S corpora- tion Clause in Contracts

Stock treated as held by S corpora- tion. For purposes of satisfying the 100 percent stock ownership requirement in section 1361(b)(3)(B)(i) and paragraph (a)(1) of this section— (1) Stock of a corporation is treated as held by an S corporation if the S corporation is the owner of that stock for Federal income tax purposes; and (2) Any outstanding instruments, ob- ligations, or arrangements of the cor- poration which would not be considered stock for purposes of section 1361(b)(1)(D) if the corporation were an S corporation are not treated as out- standing stock of the QSub.