### Question
How is the "family-owned corporation" defined?


### Answer
The term **family-owned corporation** is defined in *26 U.S.C. § 354* as follows -

> any corporation which is described in clause (i) of section 447(d)(2)(C) throughout the 8-year period beginning on the date which is 5 years before the date of the recapitalization

#### Citation:
  - *26 U.S.C. § 354*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter C-Corporate Distributions and Adjustments > PART III-CORPORATE ORGANIZATIONS AND REORGANIZATIONS > Subpart B-Effects on Shareholders and Security Holders**

