nonallocation year
(A)The term “nonallocation year” means any plan year of an employee stock ownership plan if, at any time during such plan year— (i)such plan holds employer securities consisting of stock in an S corporation, and (ii)disqualified persons own at least 50 percent of the number of shares of stock in the S corporation. (B)For purposes of subparagraph (A)— (i)The rules ofshall apply for purposes of determining ownership, except that— (I)in applying paragraph (1) thereof, the members of an individual’s family shall include members of the family described in paragraph (4)(D), and (II)paragraph (4) thereof shall not apply. (ii)Notwithstanding the employee trust exception in section 318(a)(2)(B)(i), an individual shall be treated as owning deemed-owned shares of the individual.