What is a more than 5% owner?

For a business entity that isn't a corporation, any person who owns more than 5% of the capital or profits interest in the business is considered a more than 5% owner. For example, a sole proprietor or a partner.

For a corporation, a more than 5% owner is any person who owns, or is considered to own, either of the following:

• More than 5% of the outstanding stock of the corporation
• Stock possessing more than 5% of the total combined voting power of all stock in the corporation

A related person is treated the same as an owner.

For the purposes of asset depreciation, only the following members of the family are considered related: a spouse, child, parent, brother, sister, half-brother, half-sister, ancestor, or lineal descendant.