52 STAT.] 75TH CONG. , 3D SESS.-CH. 289-MAY 28, 1938 (g) RENTS.- Rents, unless constituting 50 per centum or more of R ent . the gross income. For the purposes of this subsection the term "rents" means compensation, however designated, for the use of, or right to use, property; but does not include amounts constituting foreign personal holding company income under subsection (f). SEC. 333 . STOCK OWNERSHIP. 547 Stock ownership. (a) CoNsTRUCTIn OWNERHIP. -For the purpose of determining Constructive own- whether a foreign corporation is a foreign personal holding company, sh insofar as such determination is based on stock ownership under section 331 (a) (2), section 332 (e), or section 332 (f)- Ante,pp.545 ,46. (1) STOCK NOT OWNED BY INDIVIDUAL. --Stock owned, directly or Stock not owned by indirectly, by or for a corporation, partnership, estate, or trust via shall be considered as being owned proportionately by its share- holders, partners, or beneficiaries. (2) FAMILY AND PARTNERSHIP OWNERSHIP.- An individual shall Family and part- be considered as owning the stock owned, directly or indirectly, neship ownership by or for his family or by or for his partner. For the purposes of this paragraph the family of an individual includes only his brothers and sisters (whether by the whole or half blood), spouse, ancestors, and lineal descendants. (3) OPTIONS. - If any person has an option to acquire stock Options. such stock shall be considered as owned by such person. For the purposes of this paragraph an option to acquire such an option, and each one of a series of such options, shall be considered as an option to acquire such stock. (4) APPLICATION OF FAMILY-PARTNERSHIP AND OPTION RULES. - Application of fam- Paragraphs (2) and (3) shall be applied- optoartnh i and (A) For the purposes of the stock ownership requirement provided in section 331 (a) (2), if, but only if, the effect Ante, p.6. is to make the corporation a foreign personal holding com- pany; (B) For the purposes of section 332 (e) (relating to per- Ante, p.546. sonal service contracts), or of section 332 (f) (relating to the use of property by shareholders), if, but only if, the effect is to make the amounts therein referred to includible under such subsection as foreign personal holding company income. (5) CONSTRUCTIVE OWNERSHIP AS ACTUAL OWNERSHIP.-Stock Constructive own. constructively owned by a person by reason of the application of ership.' act ual own- paragraph (1) or (3) shall, for the purpose of applying para- graph (1) or (2), be treated as actually owned by such person; but stock constructively owned by an individual by reason of the application of paragraph (2) shall not be treated as owned by him for the purpose of again applying such paragraph in order to make another the constructive owner of such stock. (6) OPTION RULE IN LIEU OF FAMILY AND PARTNERSHIP RULE. - Option rule In lieu If stock may be considered as owned by an individual under lamly andartner- either paragraph (2) or (3) it shall be considered as owned by him under paragraph (3). (b) CONVERTILE SECURITIES.- Outstanding securities convertible Convertible secri- into stock (whether or not convertible during the taxable year) shall ie s . be considered as outstanding stock- (1) For the purpose of the stock ownership requirement pro- vided in section 331 (a) (2), but only if the effect of the inclusion of all such securities is to make the corporation a foreign per- sonal holding company;
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