applicable date
(1) Members of a family treated as 1 shareholder (A) In general For purposes of subsection (b)(1)(A), there shall be treated as one shareholder— (i) a husband and wife (and their estates), and (ii) all members of a family (and their estates). (B) Members of a family For purposes of this paragraph— (i) In general The term “members of a family” means a common ancestor, any lineal descendant of such common ancestor, and any spouse or former spouse of such common ancestor or any such lineal descendant. (ii) Common ancestor An individual shall not be considered to be a common ancestor if, on the applicable date, the individual is more than 6 generations removed from the youngest generation of shareholders who would (but for this subparagraph) be members of the family. For purposes of the preceding sentence, a spouse (or former spouse) shall be treated as being of the same generation as the individual to whom such spouse is (or was) married. (iii) Applicable date The term “applicable date” means the latest of— (I) the date the election under section 1362(a) is made, (II) the earliest date that an individual described in clause (i) holds stock in the S corporation, or (III) October 22, 2004 . (C) Effect of adoption, etc. Any legally adopted child of an individual, any child who is lawfully placed with an individual for legal adoption by the individual, and any eligible foster child of an individual (within the meaning of section 152(f)(1)(C) ), shall be treated as a child of such individual by blood.