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In which one of the following ownership combinations of the Pete and Louie partnership would Pete be treated as owning more than 50% of the partnership?

A) Pete 30 percent, Pete's Wife 10 percent, Pete's Aunt 60 percent

B) Pete 45 percent, Pete's Uncle's Trust 55 percent

C) Pete 10 percent, Pete's Wife's Corporation 90 percent

D) Pete 30 percent, Pete's Father 10 percent, Pete's Nephew 60 percent

Answer :

Final answer:

The scenario where Pete is considered to own over 50% of the shares depends on immediate family attribution and indirect share attribution rules, but seems to be scenario C, where Pete owns 10 percent and Pete's wife's corporation owns 90 percent.

Explanation:

The problem relates to the ownership share in a partnership. To determine which scenario indicates that Pete holds over 50 percent ownership in the partnership, we ought to consider not only Pete's direct share but also any interest held by his immediate family, depending upon the legal jurisdiction.

a) In the prior scenario, Pete holds 30 percent directly, his wife, as an immediate family member, holds 10 percent, bringing Pete's total to 40 percent. Pete's aunt holds 60 percent. As this is not immediate family (only sometimes considered under attribution rules), Pete is considered to hold less than one-half of the partnership.

b) In this case, Pete has 45 percent, but the remaining 55 percent is held by his uncle's trust. As indirect ownership typically isn't considered within immediate family boundaries, Pete is only considered to possess 45 percent.

c) Pete directly owns 10 percent. Pete's wife's corporation owns the remaining 90 percent. Depending upon jurisdiction again, as Pete's wife is an immediate family member, we might consider Pete to theoretically have access to these shares. In this case, Pete could be considered as possessing over 50 percent of the partnership.

d) Pete holds 30 percent, his father holds 10 percent, and his nephew has 60 percent. Pete's direct and immediate family ownership equates to 40 percent, which isn't more than 50 percent.

Overall the answer depends on local legal jurisdiction and how they rule on family and indirect share attribution. Legally, the apparent answer would be 'C', but it's essential to note the legal gray areas surrounding this.

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