Real Property Income of Foreign Persons

T, a nonresident alien, is a shareholder of X Corp., whose assets consist of a retailing business in Canada and stock of Y Corp.Y’s principal asset is an office building in Miami, but it also holds a portfolio of stocks and bonds of Canadian corporations.How might IRC section 897 apply to gain recognized by T on a sale of her X Stock if, alternately:

a) X holds 40 percent of Y’s stock, and alternatively:
i) X and Y are both domestic corporations?
ii) X is a domestic corporation, and Y is a foreign corporation?
iii) X is a foreign corporation, and Y is a domestic corporation?

b) X holds 60 percent of Y’s stock, and alternatively:
i) X and Y are both domestic corporations?
ii) X is a domestic corporation, and Y is a foreign corporation?
iii) X is a foreign corporation, and Y is a domestic corporation?

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