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TITLE 26-INTERNAL REVENUE CODE made are persons specified within any one of the paragraphs of subsection (b). (b) Relationships The persons referred to in subsection (a) are: (1) Members of a family, as defined in sub- section (c)(4); (2) An individual and a corporation more than 50 percent in value of the outstanding stock of which is owned, directly or indirectly, by or for such individual; (3) Two corporations more than 50 percent in value of the outstanding stock of each of which is owned, directly or indirectly, by or for the same individual, if either one of such corporations, with respect to the taxable year of the corporation preceding the date of the sale or exchange was, under the law applica- ble to such taxable year, a personal holding company or a foreign personal holding com- pany; (4) A grantor and a fiduciary of any trust; (5) A fiduciary of a trust and a fiduciary of another trust, if the same person is a grantor of both trusts; (6) A fiduciary of a trust and a beneficiary of such trust; (7) A fiduciary of a trust and a beneficiary of another trust, if the same person is a gran- tor of both trusts; (8) A fiduciary of a trust and a corporation more than 50 percent in value of the out- standing stock of which is owned, directly or indirectly, by or for the trust or by or for a person who is a grantor of the trust; or (9) A person and an organization to which section 501 (relating to certain educational and charitable organizations which are exempt from tax) applies and which is con- trolled directly or indirectly by such person or (if such person is an individual) by mem- bers of the family of such individual. (c) Constructive ownership of stock For purposes of determining, in applying sub- section (b), the ownership of stock- (1) Stock owned, directly or indirectly, by or for a corporation, partnership, estate, or trust shall be considered as being owned propor- tionately by or for its shareholders, partners, or beneficiaries; (2) An individual shall be considered as owning the stock owned, directly or indirect- ly, by or for his family; (3) An individual owning (otherwise than by the application of paragraph (2)) any stock in a corporation shall be considered as owning the stock owned, directly or indirectly, by or for his partner; (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 (5) Stock constructively owned by a person by reason of the application of paragraph (1) shall, for the purpose of applying paragraph (1), (2), or (3), be treated as actually owned by such person, but stock constructively owned by an individual by reason of the application of paragraph (2) or (3) shall not be treated as owned by him for the purpose of again apply- ing either of such paragraphs in order to make another the constructive owner of such stock. (d) Amount of gain where loss previously disallowed If- (1) in the case of a sale or exchange of prop- erty to the taxpayer a loss sustained by the transferor is not allowable to the transferor as a deduction by reason of subsection (a)(1) (or by reason of section 24(b) of the Internal Revenue Code of 1939); and (2) after December 31, 1953, the taxpayer sells or otherwise disposes of such property (or of other property the basis of which in his hands is determined directly or indirectly by reference to such property) at a gain, then such gain shall be recognized only to the extent that it exceeds so much of such loss as is properly allocable to the property sold or oth- erwise disposed of by the taxpayer. This subsec- tion applies with respect to taxable years ending after December 31, 1953. This subsec- tion shall not apply if the loss sustained by the transferor Is not allowable to the transferor as a deduction by reason of section 1091 (relating to wash sales) or by reason of section 118 of the Internal Revenue Code of 1939. (Aug. 16, 1954, ch. 736, 68A Stat. 78.) REFERENCES IN TEXT Sections 24(b) and 118 of the Internal Revenue Code of 1939, referred to in subsec. (d), were classified to sections 24(b) and 118 of former Title 26, Internal Revenue Code. Sections 24(b) and 118 were repealed by section 7851(a)(1) of this title. For table of compari- sons of the 1939 Code to the 1954 Code, see Table I preceding section 1 of this title. See, also, section 7851(e) of this title for provision that references in the 1954 Code to a provision of the 1939 Code, not then applicable, shall be deemed a reference to the corre- sponding provision of the 1954 Code, which is then ap- plicable. CROSS REFERENCES Corporate and individual losses deductible, see sec- tion 165 of this title. Interest paid deductible, see section 163 of this title. Subsection (c) of this section applicable to unincor- porated business enterprises, see section 1361 of this title. Transaction between partners, see section 707 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 44, 48, 50B, 103, 163, 170, 178, 179, 274, 280A, 341, 465, 503, 613A, 631, 707, 1235, 1237, 4946, 4975 of this title; title 29 sec- tion 1108. § 268. Sale of land with unharvested crop Where an unharvested crop sold by the tax- payer is considered under the provisions of sec- tion 1231 as "property used in the trade or busi- ness", in computing taxable income no deduc- tion (whether or not for the taxable year of the sale and whether for expenses, depreciation, or otherwise) attributable to the production of such crop shall be allowed. (Aug. 16, 1954, ch. 736, 68A Stat. 80.) CROSS REFERENCES Adjusment to basis for deductions disallowed under thL, section, see section 1016 of this title. Page 215 § 268