### Question
How is the "25-percent owner" defined?


### Answer
The term **25-percent owner** is defined in *26 U.S.C. § 954* as follows -

> a controlled foreign corporation which owns directly 25 percent or more of the capital or profits interest in a partnership

#### Citation:
  - *26 U.S.C. § 954*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter N-Tax Based on Income From Sources Within or Without the United States > PART III-INCOME FROM SOURCES WITHOUT THE UNITED STATES > Subpart F-Controlled Foreign Corporations**

