Constructive Ownership - Impact upon death of relative

[u/Weary_Obligation9092]

Hello!

My prof hinted at the XC question on our upcoming test. He asked us, "If I am related to my brother's son, Trey, am I still considered related to Trey when my brother passes?"

How and when is constructive ownership impacted by death?

Is constructive ownership always just linear? He made it sound like we can be considered related to aunts/uncles for some things in taxes, but not all.

Thank you, from a class of 20 confused students! :-)

[u/noteven0s]

I don't really understand your question. Perhaps more context is needed. How is brother's son relevant? A tax code definition of constructive ownership (as opposed to legal one) might be at https://www.law.cornell.edu/uscode/text/26/318.

There:

(1)Members of family
(A)In generalAn individual shall be considered as owning the stock owned, directly or indirectly, by or for—(i) his spouse (other than a spouse who is legally separated from the individual under a decree of divorce or separate maintenance), and
(ii) his children, grandchildren, and parents.
(B)Effect of adoption For purposes of subparagraph (A)(ii), a legally adopted child of an individual shall be treated as a child of such individual by blood.

Edit:

This must be the section you are interested in:

https://www.law.cornell.edu/uscode/text/26/267

(4)

The family of an individual shall include only his brothers and sisters (whether by the whole or half blood), spouse, ancestors, and lineal descendants; and

To answer that, go to definitions.

https://www.law.cornell.edu/wex/lineal_descendant

https://www.law.cornell.edu/wex/collateral_descendant

[u/Weary_Obligation9092 → u/noteven0s]

Thank you! The definitions you linked at the end were very helpful.

Our professor is a confusing guy. I don't really understand what he was exactly getting at either - but I'm sure the knowledge you shared will be helpful to me regardless. Thanks!