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TITLE 26-INTERNAL REVENUE CODE ing subsecs. (a) and (b) of this section] shall apply to taxable years beginning after the date of the enact- ment of this Act (November 13, 1966]. Such amend- ments ahall also apply, at the election of the taxpayer (made at such time and in such manner as the Secre- tary or his delegate may prescribe), to taxable years beginning on or before such date and ending after De- cember 31, 1965." Amendment of subsec. (b)(1) by section 104(h)(2) of Pub. L. 89-809 applicable with respect to taxable years beginning after Dec. 31, 1966, see section 104(n) of Pub. L. 89-809, set out as an Effective Date of 1966 Amendment note under section 11 of this title. EFFCTIVE DATE OF 1964 AlmEMENT Section 3(b) of Pub. L. 88-484 provided that: "The amendment made by subsection (a) [to subsec. (a)(2) of this section] shall apply to taxable years beginning after December 31, 1963." Amendment by Pub. L. 88-272 applicable to taxable years beginning after Dec. 31, 1963, see section 225() of Pub. L. 88-272 set out as an Effective Date of 1964 Amendment note under section 316 of this title. EFFECTIVE DATE OF 1962 AMaimEirr Amendment by Pub. L. 87-403 applicable only with respect to distributions made after Feb. 2, 1962, see section 3(g) of Pub. L. 87-403. set out as an Effective Date of 1962 Amendments note under section 312 of this title. EFrFECIVE DATE OF 1960 AMENDMErr Section 2 of Pub. L. 86-435 provided that: "The amendments made by the first section of this Act [to subsec. (a) of this section and sections 544(a), (b), and 553 of this title] shall apply only with respect to tax- able years beginning after December 31, 1959." CRoss REFERENCES Foreign personal holding company income, see sec- tion 553 of this title. Limitations on assessment and collection, see section 6501 of this title. Liquidations before Jan. 1. 1966, see section 225(h) of Pub. L. 88-272, set out as a note under section 333 of this title. Personal holding company- Definition as dependent upon personal holding company income, see section 542 of this title. Dividend defined, see section 316 of this title. Rules for determining stock ownership, see section 544 of this title. Unincorporated business enterprises electing to be taxed as domestic corporations and treatment of per- sonal holding company income, see'section 1361 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 542, 544, 545, 856, 864, 992, 6501 of this title. § 544. Rules for determining stock ownership (a) Constructive ownership For purposes of determining whether a corpo- ration is a personal holding company, insofar as such determination is based on stock ownership under section 542(a)(2), section 543(a)(7), sec- tion 543(a)(6), or section 543(a)(4)- (1) Stock not owned by individual Stock owned, directly or indirectly, by or for R corporation, partnership, estate, or trust shall be considered as being owned propor- tionately by its shareholders, partners, or beneficiaries. (2) Family and partnership ownership An individual shall be considered as owning the stock owned, directly or indirectly, by or for his family or by or for his partner. For purposes of this paragraph, the family of an individual includes only his brothers and sis- ters (whether by the whole or half blood), spouse, ancestors, and lineal descendants. (3) Options If any person has an option to acquire stock, such stock shall be considered as owned by such person. For purposes of this para- graph, 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 Paragraphs (2) and (3) shall be applied- (A) for purposes of the stock ownership requirement provided in section 542(a)(2), if, but only if, the effect is to make the cor- poration a personal holding company; (B) for purposes of section 543(a)(7) (re- lating to personal service contracts), of sec- tion 543(a)(6) (relating to use of property by shareholders), or of section 543(a)(4) (re- lating to copyright royalties), if, but only if, the effect is to make the amounts therein referred to includible under such paragraph as personal holding company income. (5) Constructive ownership as actual ownership Stock constructively owned by a person by reason of the application of paragraph (1) or (3), shall, for purposes of applying paragraph (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 purposes 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 If stock may be considered as owned by an individual under either paragraph (2) or (3) it shall be considered as owned by him under paragraph (3). (b) Convertible securities Outstanding securities convertible into stock (whether or not convertible during the taxable year) shall be considered as outstanding stock- (1) for purposes of the stock ownership re- quirement provided in section 542(a)(2), but only if the effect of the inclusion of all such securities is to make the corporation a person- al holding company; (2) for purposes of section 543(a)(7) (relat- ing to personal service contracts), but only if the effect of the inclusion of all such securi- ties is to make the amounts therein referred to includible under such paragraph as person- al holding company income; (3) for purposes of section 543(a)(6) (relat- ing to the use of property by shareholders), but only if the effect of the inclusion of all such securities is to make the amounts there- in referred to includible under such para- graphs as personal holding company income; and (4) for purposes of section 543(a)(4) (relat- ing to copyright royalties), but only if the effect of the inclusion of all such securities is Page 415 § 544