### Question
What does applicable preferred stock mean?


### Answer
**Applicable preferred stock** has the following meaning in *26 U.S.C. § 1503*:

> stock described in section 1504(a)(4) in the subsidiary which is—


(i) issued after November 17, 1989, and


(ii) held by a person other than a member of the same affiliated group as the subsidiary

#### Citation:
  - *26 U.S.C. § 1503*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 6-CONSOLIDATED RETURNS > Subchapter A-Returns and Payment of Tax**

