§302 — Distributions in redemption of stock
222 citing cases
Statute Text — 26 U.S.C. §302
If a corporation redeems its stock (within the meaning of section 317(b)), and if paragraph (1), (2), (3), (4), or (5) of subsection (b) applies, such redemption shall be treated as a distribution in part or full payment in exchange for the stock.
Subsection (a) shall apply if the redemption is not essentially equivalent to a dividend.
Subsection (a) shall apply if the distribution is substantially disproportionate with respect to the shareholder.
This paragraph shall not apply unless immediately after the redemption the shareholder owns less than 50 percent of the total combined voting power of all classes of stock entitled to vote.
For purposes of this paragraph, the distribution is substantially disproportionate if—
the ratio which the voting stock of the corporation owned by the shareholder immediately after the redemption bears to all of the voting stock of the corporation at such time,
the ratio which the voting stock of the corporation owned by the shareholder immediately before the redemption bears to all of the voting stock of the corporation at such time.
is less than 80 percent of—
This paragraph shall not apply to any redemption made pursuant to a plan the purpose or effect of which is a series of redemptions resulting in a distribution which (in the aggregate) is not substantially disproportionate with respect to the shareholder.
Subsection (a) shall apply if the redemption is in complete redemption of all of the stock of the corporation owned by the shareholder.
Subsection (a) shall apply to a distribution if such distribution is—
in redemption of stock held by a shareholder who is not a corporation, and
in partial liquidation of the distributing corporation.
Except to the extent provided in regulations prescribed by the Secretary, subsection (a) shall apply to any distribution in redemption of stock of a publicly offered regulated investment company (within the meaning of section 67(c)(2)(B)) if—
such redemption is upon the demand of the stockholder, and
such company issues only stock which is redeemable upon the demand of the stockholder.
In determining whether a redemption meets the requirements of paragraph (1), the fact that such redemption fails to meet the requirements of paragraph (2), (3), or (4) shall not be taken into account. If a redemption meets the requirements of paragraph (3) and also the requirements of paragraph (1), (2), or (4), then so much of subsection (c)(2) as would (but for this sentence) apply in respect of the acquisition of an interest in the corporation within the 10-year period beginning on the date of the distribution shall not apply.
Except as provided in paragraph (2) of this subsection, section 318(a) shall apply in determining the ownership of stock for purposes of this section.
In the case of a distribution described in subsection (b)(3), section 318(a)(1) shall not apply if—
immediately after the distribution the distributee has no interest in the corporation (including an interest as officer, director, or employee), other than an interest as a creditor,
the distributee does not acquire any such interest (other than stock acquired by bequest or inheritance) within 10 years from the date of such distribution, and
the distributee, at such time and in such manner as the Secretary by regulations prescribes, files an agreement to notify the Secretary of any acquisition described in clause (ii) and to retain such records as may be necessary for the application of this paragraph.
If the distributee acquires such an interest in the corporation (other than by bequest or inheritance) within 10 years from the date of the distribution, then the periods of limitation provided in sections 6501 and 6502 on the making of an assessment and the collection by levy or a proceeding in court shall, with respect to any deficiency (including interest and additions to the tax) resulting from such acquisition, include one year immediately following the date on which the distributee (in accordance with regulations prescribed by the Secretary) notifies the Secretary of such acquisition; and such assessment and collection may be made notwithstanding any provision of law or rule of law which otherwise would prevent such assessment and collection.
Subparagraph (A) of this paragraph shall not apply if—
any portion of the stock redeemed was acquired, directly or indirectly, within the 10-year period ending on the date of the distribution by the distributee from a person the ownership of whose stock would (at the time of distribution) be attributable to the distributee under section 318(a), or
any person owns (at the time of the distribution) stock the ownership of which is attributable to the distributee under section 318(a) and such person acquired any stock in the corporation, directly or indirectly, from the distributee within the 10-year period ending on the date of the distribution, unless such stock so acquired from the distributee is redeemed in the same transaction.
The preceding sentence shall not apply if the acquisition (or, in the case of clause (ii), the disposition) by the distributee did not have as one of its principal purposes the avoidance of Federal income tax.
Subparagraph (A) shall not apply to a distribution to any entity unless—
such entity and each related person meet the requirements of clauses (i), (ii), and (iii) of subparagraph (A), and
each related person agrees to be jointly and severally liable for any deficiency (including interest and additions to tax) resulting from an acquisition described in clause (ii) of subparagraph (A).
For purposes of this subparagraph—
the term “entity” means a partnership, estate, trust, or corporation; and
the term “related person” means any person to whom ownership of stock in the corporation is (at the time of the distribution) attributable under section 318(a)(1) if such stock is further attributable to the entity under section 318(a)(3).
In any case to which the preceding sentence applies, the second sentence of subparagraph (A) and subparagraph (B)(ii) shall be applied by substituting “distributee or any related person” for “distributee” each place it appears.
Except as otherwise provided in this subchapter, if a corporation redeems its stock (within the meaning of section 317(b)), and if subsection (a) of this section does not apply, such redemption shall be treated as a distribution of property to which section 301 applies.
For purposes of subsection (b)(4), a distribution shall be treated as in partial liquidation of a corporation if—
the distribution is not essentially equivalent to a dividend (determined at the corporate level rather than at the shareholder level), and
the distribution is pursuant to a plan and occurs within the taxable year in which the plan is adopted or within the succeeding taxable year.
The distributions which meet the requirements of paragraph (1)(A) shall include (but shall not be limited to) a distribution which meets the requirements of subparagraphs (A) and (B) of this paragraph:
The distribution is attributable to the distributing corporation’s ceasing to conduct, or consists of the assets of, a qualified trade or business.
Immediately after the distribution, the distributing corporation is actively engaged in the conduct of a qualified trade or business.
For purposes of paragraph (2), the term “qualified trade or business” means any trade or business which—
was actively conducted throughout the 5-year period ending on the date of the redemption, and
was not acquired by the corporation within such period in a transaction in which gain or loss was recognized in whole or in part.
Whether or not a redemption meets the requirements of subparagraphs (A) and (B) of paragraph (2) shall be determined without regard to whether or not the redemption is pro rata with respect to all of the shareholders of the corporation.
For purposes of determining under subsection (b)(4) whether any stock is held by a shareholder who is not a corporation, any stock held by a partnership, estate, or trust shall be treated as if it were actually held proportionately by its partners or beneficiaries.
For special rules relating to redemption—
Of stock to pay death taxes, see section 303.
Of section 306 stock, see section 306.
Of stock in complete liquidation, see section 331.
Treasury Regulations
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Treas. Reg. §1.302-1General
(a) Under section 302(d), unless otherwise provided in subchapter C, chapter 1 of the Code, a distribution in redemption of stock shall be treated as a distribution of property to which section 301 applies if the distribution is not within any of the provisions of section 302(b). A distribution in redemption of stock shall be considered a distribution in part or full payment in exchange for the stock under section 302(a) provided paragraph (1), (2), (3), or (4) of section 302(b) applies. Section 318(a) (relating to constructive ownership of stock) applies to all redemptions under section 302 except that in the termination of a shareholder's interest certain limitations are placed on the application of section 318(a)(1) by section 302(c)(2). The term redemption of stock is defined in section 317(b). Section 302 does not apply to that portion of any distribution which qualifies as a distribution in partial liquidation under section 346. For special rules relating to redemption of stock to pay death taxes see section 303. For special rules relating to redemption of section 306 stock see section 306. For special rules relating to redemption of stock in partial or complete liquidation see section 331.
(b) If, in connection with a partial liquidation under the terms of section 346, stock is redeemed in an amount in excess of the amount specified by section 331(a)(2), section 302(b) shall first apply as to each shareholder to which it is applicable without limitation because of section 331(a)(2). That portion of the total distribution which is used in all redemptions from specific shareholders which are within the terms of section 302(a) shall be excluded in determining the application of sections 346 and 331(a)(2). For example, Corporation X has $50,000 which is attributable to the sale of one of two active businesses and which, if distributed in redemption of stock, would qualify as a partial liquidation under the terms of section 346(b). Corporation X distributes $60,000 to its shareholders in redemption of stock, $20,000 of which is in redemption of all of the stock of shareholder A within the meaning of section 302(b)(3). The $20,000 distributed in redemption of the stock of shareholder A will be excluded in determining the application of sections 346 and 331(a)(2). The entire $60,000 will be treated as in part or full payment for stock ($20,000 qualifying under section 302(a) and $40,000 qualifying under sections 346 and 331(a)(2)).
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Treas. Reg. §1.302-1(a)Under section 302(d), unless otherwise provided in subchapter C, chapter 1 of the Code, a distribution in redemption of stock shall be treated as a distribution of property to which section 301 applies if the distribution is not within any of the provisions of section 302(b).
Under section 302(d), unless otherwise provided in subchapter C, chapter 1 of the Code, a distribution in redemption of stock shall be treated as a distribution of property to which section 301 applies if the distribution is not within any of the provisions of section 302(b). A distribution in redemption of stock shall be considered a distribution in part or full payment in exchange for the stock under section 302(a) provided paragraph (1), (2), (3), or (4) of section 302(b) applies. Section 318(a) (relating to constructive ownership of stock) applies to all redemptions under section 302 except that in the termination of a shareholder's interest certain limitations are placed on the application of section 318(a)(1) by section 302(c)(2). The term redemption of stock is defined in section 317(b). Section 302 does not apply to that portion of any distribution which qualifies as a distribution in partial liquidation under section 346. For special rules relating to redemption of stock to pay death taxes see section 303. For special rules relating to redemption of section 306 stock see section 306. For special rules relating to redemption of stock in partial or complete liquidation see section 331.
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Treas. Reg. §1.302-1(b)If, in connection with a partial liquidation under the terms of section 346, stock is redeemed in an amount in excess of the amount specified by section 331(a)(2), section 302(b) shall first apply as to each shareholder to which it is applicable without limitation because of section 331(a)(2).
If, in connection with a partial liquidation under the terms of section 346, stock is redeemed in an amount in excess of the amount specified by section 331(a)(2), section 302(b) shall first apply as to each shareholder to which it is applicable without limitation because of section 331(a)(2). That portion of the total distribution which is used in all redemptions from specific shareholders which are within the terms of section 302(a) shall be excluded in determining the application of sections 346 and 331(a)(2). For example, Corporation X has $50,000 which is attributable to the sale of one of two active businesses and which, if distributed in redemption of stock, would qualify as a partial liquidation under the terms of section 346(b). Corporation X distributes $60,000 to its shareholders in redemption of stock, $20,000 of which is in redemption of all of the stock of shareholder A within the meaning of section 302(b)(3). The $20,000 distributed in redemption of the stock of shareholder A will be excluded in determining the application of sections 346 and 331(a)(2). The entire $60,000 will be treated as in part or full payment for stock ($20,000 qualifying under section 302(a) and $40,000 qualifying under sections 346 and 331(a)(2)).
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Treas. Reg. §1.302-2Redemptions not taxable as dividends
(a) In general. The fact that a redemption fails to meet the requirements of paragraph (2), (3) or (4) of section 302(b) shall not be taken into account in determining whether the redemption is not essentially equivalent to a dividend under section 302(b)(1). See, however, paragraph (b) of this section. For example, if a shareholder owns only nonvoting stock of a corporation which is not section 306 stock and which is limited and preferred as to dividends and in liquidation, and one-half of such stock is redeemed, the distribution will ordinarily meet the requirements of paragraph (1) of section 302(b) but will not meet the requirements of paragraph (2), (3) or (4) of such section. The determination of whether or not a distribution is within the phrase “essentially equivalent to a dividend” (that is, having the same effect as a distribution without any redemption of stock) shall be made without regard to the earnings and profits of the corporation at the time of the distribution. For example, if A owns all the stock of a corporation and the corporation redeems part of his stock at a time when it has no earnings and profits, the distribution shall be treated as a distribution under section 301 pursuant to section 302(d).
(b) Redemption not essentially equivalent to a dividend—(1) In general. The question whether a distribution in redemption of stock of a shareholder is not essentially equivalent to a dividend under section 302(b)(1) depends upon the facts and circumstances of each case. One of the facts to be considered in making this determination is the constructive stock ownership of such shareholder under section 318(a). All distributions in pro rata redemptions of a part of the stock of a corporation generally will be treated as distributions under section 301 if the corporation has only one class of stock outstanding. However, for distributions in partial liquidation, see section 302(e). The redemption of all of one class of stock (except section 306 stock) either at one time or in a series of redemptions generally will be considered as a distribution under section 301 if all classes of stock outstanding at the time of the redemption are held in the same proportion. Distributions in redemption of stock may be treated as distributions under section 301 regardless of the provisions of the stock certificate and regardless of whether all stock being redeemed was acquired by the stockholders from whom the stock was redeemed by purchase or otherwise.
(2) Statement. Unless § 1.331-1(d) applies, every significant holder that transfers stock to the issuing corporation in exchange for property from such corporation must include on or with such holder's return for the taxable year of such exchange a statement entitled, “STATEMENT PURSUANT TO § 1.302-2(b)(2) BY [INSERT NAME AND TAXPAYER IDENTIFICATION NUMBER (IF ANY) OF TAXPAYER], A SIGNIFICANT HOLDER OF THE STOCK OF [INSERT NAME AND EMPLOYER IDENTIFICATION NUMBER (IF ANY) OF ISSUING CORPORATION].” If a significant holder is a controlled foreign corporation (within the meaning of section 957), each United States shareholder (within the meaning of section 951(b)) with respect thereto must include this statement on or with its return. The statement must include—
(i) The fair market value and basis of the stock transferred by the significant holder to the issuing corporation; and
(ii) A description of the property received by the significant holder from the issuing corporation.
(3) Definitions. For purposes of this section:
(i) Significant holder means any person that, immediately before the exchange—
(A) Owned at least five percent (by vote or value) of the total outstanding stock of the issuing corporation if the stock owned by such person is publicly traded; or
(B) Owned at least one percent (by vote or value) of the total outstanding stock of the issuing corporation if the stock owned by such person is not publicly traded.
(ii) Publicly traded stock means stock that is listed on—
(A) A national securities exchange registered under section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f); or
(B) An interdealer quotation system sponsored by a national securities association registered under section 15A of the Securities Exchange Act of 1934 (15 U.S.C. 78o-3).
(iii) Issuing corporation means the corporation that issued the shares of stock, some or all of which were transferred by a significant holder to such corporation in the exchange described in paragraph (b)(2) of this section.
(4) Cross reference. See section 6043 of the Internal Revenue Code for requirements relating to a return by a liquidating corporation.
(c) Basis adjustments. In any case in which an amount received in redemption of stock is treated as a distribution of a dividend, proper adjustment of the basis of the remaining stock will be made with respect to the stock redeemed. (For adjustments to basis required for certain redemptions of corporate shareholders that are treated as extraordinary dividends, see section 1059 and the regulations thereunder.) The following examples illustrate the application of this rule:
(d) Effective/applicability date. Paragraphs (b)(2), (b)(3) and (b)(4) of this section apply to any taxable year beginning on or after May 30, 2006. However, taxpayers may apply paragraphs (b)(2), (b)(3) and (b)(4) of this section to any original Federal income tax return (including any amended return filed on or before the due date (including extensions) of such original return) timely filed on or after May 30, 2006. For taxable years beginning before May 30, 2006, see § 1.302-2 as contained in 26 CFR part 1 in effect on April 1, 2006.
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Treas. Reg. §1.302-2(a)In general.
In general. The fact that a redemption fails to meet the requirements of paragraph (2), (3) or (4) of section 302(b) shall not be taken into account in determining whether the redemption is not essentially equivalent to a dividend under section 302(b)(1). See, however, paragraph (b) of this section. For example, if a shareholder owns only nonvoting stock of a corporation which is not section 306 stock and which is limited and preferred as to dividends and in liquidation, and one-half of such stock is redeemed, the distribution will ordinarily meet the requirements of paragraph (1) of section 302(b) but will not meet the requirements of paragraph (2), (3) or (4) of such section. The determination of whether or not a distribution is within the phrase “essentially equivalent to a dividend” (that is, having the same effect as a distribution without any redemption of stock) shall be made without regard to the earnings and profits of the corporation at the time of the distribution. For example, if A owns all the stock of a corporation and the corporation redeems part of his stock at a time when it has no earnings and profits, the distribution shall be treated as a distribution under section 301 pursuant to section 302(d).
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Treas. Reg. §1.302-2(b)Redemption not essentially equivalent to a dividend—(1) In general.
Redemption not essentially equivalent to a dividend—(1) In general. The question whether a distribution in redemption of stock of a shareholder is not essentially equivalent to a dividend under section 302(b)(1) depends upon the facts and circumstances of each case. One of the facts to be considered in making this determination is the constructive stock ownership of such shareholder under section 318(a). All distributions in pro rata redemptions of a part of the stock of a corporation generally will be treated as distributions under section 301 if the corporation has only one class of stock outstanding. However, for distributions in partial liquidation, see section 302(e). The redemption of all of one class of stock (except section 306 stock) either at one time or in a series of redemptions generally will be considered as a distribution under section 301 if all classes of stock outstanding at the time of the redemption are held in the same proportion. Distributions in redemption of stock may be treated as distributions under section 301 regardless of the provisions of the stock certificate and regardless of whether all stock being redeemed was acquired by the stockholders from whom the stock was redeemed by purchase or otherwise.
(2) Statement. Unless § 1.331-1(d) applies, every significant holder that transfers stock to the issuing corporation in exchange for property from such corporation must include on or with such holder's return for the taxable year of such exchange a statement entitled, “STATEMENT PURSUANT TO § 1.302-2(b)(2) BY [INSERT NAME AND TAXPAYER IDENTIFICATION NUMBER (IF ANY) OF TAXPAYER], A SIGNIFICANT HOLDER OF THE STOCK OF [INSERT NAME AND EMPLOYER IDENTIFICATION NUMBER (IF ANY) OF ISSUING CORPORATION].” If a significant holder is a controlled foreign corporation (within the meaning of section 957), each United States shareholder (within the meaning of section 951(b)) with respect thereto must include this statement on or with its return. The statement must include—
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Treas. Reg. §1.302-2(c)Basis adjustments.
Basis adjustments. In any case in which an amount received in redemption of stock is treated as a distribution of a dividend, proper adjustment of the basis of the remaining stock will be made with respect to the stock redeemed. (For adjustments to basis required for certain redemptions of corporate shareholders that are treated as extraordinary dividends, see section 1059 and the regulations thereunder.) The following examples illustrate the application of this rule:
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Treas. Reg. §1.302-2(d)Effective/applicability date.
Effective/applicability date. Paragraphs (b)(2), (b)(3) and (b)(4) of this section apply to any taxable year beginning on or after May 30, 2006. However, taxpayers may apply paragraphs (b)(2), (b)(3) and (b)(4) of this section to any original Federal income tax return (including any amended return filed on or before the due date (including extensions) of such original return) timely filed on or after May 30, 2006. For taxable years beginning before May 30, 2006, see § 1.302-2 as contained in 26 CFR part 1 in effect on April 1, 2006.
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Treas. Reg. §1.302-2(i)§1.302-2(i)
Significant holder means any person that, immediately before the exchange—
(A) Owned at least five percent (by vote or value) of the total outstanding stock of the issuing corporation if the stock owned by such person is publicly traded; or
(B) Owned at least one percent (by vote or value) of the total outstanding stock of the issuing corporation if the stock owned by such person is not publicly traded.
(ii) Publicly traded stock means stock that is listed on—
(A) A national securities exchange registered under section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f); or
(B) An interdealer quotation system sponsored by a national securities association registered under section 15A of the Securities Exchange Act of 1934 (15 U.S.C. 78o-3).
(iii) Issuing corporation means the corporation that issued the shares of stock, some or all of which were transferred by a significant holder to such corporation in the exchange described in paragraph (b)(2) of this section.
(4) Cross reference. See section 6043 of the Internal Revenue Code for requirements relating to a return by a liquidating corporation.
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Treas. Reg. §1.302-3Substantially disproportionate redemption
(a) Section 302(b)(2) provides for the treatment of an amount received in redemption of stock as an amount received in exchange for such stock if—
(1) Immediately after the redemption the shareholder owns less than 50 percent of the total combined voting power of all classes of stock as provided in section 302(b)(2)(B),
(2) The redemption is a substantially disproportionate redemption within the meaning of section 302(b)(2)(C), and
(3) The redemption is not pursuant to a plan described in section 302(b)(2)(D).
Section 318(a) (relating to constructive ownership of stock) shall apply both in making the disproportionate redemption test and in determining the percentage of stock ownership after the redemption. The requirements under section 302(b)(2) shall be applied to each shareholder separately and shall be applied only with respect to stock which is issued and outstanding in the hands of the shareholders. Section 302(b)(2) only applies to a redemption of voting stock or to a redemption of both voting stock and other stock. Section 302(b)(2) does not apply to the redemption solely of nonvoting stock (common or preferred). However, if a redemption is treated as an exchange to a particular shareholder under the terms of section 302(b)(2), such section will apply to the simultaneous redemption of nonvoting preferred stock (which is not section 306 stock) owned by such shareholder and such redemption will also be treated as an exchange. Generally, for purposes of this section, stock which does not have voting rights until the happening of an event, such as a default in the payment of dividends on preferred stock, is not voting stock until the happening of the specified event. Subsection 302(b)(2)(D) provides that a redemption will not be treated as substantially disproportionate if made pursuant to a plan the purpose or effect of which is a series of redemptions which result in the aggregate in a distribution which is not substantially disproportionate. Whether or not such a plan exists will be determined from all the facts and circumstances.
(b) The application of paragraph (a) of this section is illustrated by the following example:
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Treas. Reg. §1.302-3(a)§1.302-3(a)
Section 302(b)(2) provides for the treatment of an amount received in redemption of stock as an amount received in exchange for such stock if—
(1) Immediately after the redemption the shareholder owns less than 50 percent of the total combined voting power of all classes of stock as provided in section 302(b)(2)(B),
(2) The redemption is a substantially disproportionate redemption within the meaning of section 302(b)(2)(C), and
(3) The redemption is not pursuant to a plan described in section 302(b)(2)(D).
Section 318(a) (relating to constructive ownership of stock) shall apply both in making the disproportionate redemption test and in determining the percentage of stock ownership after the redemption. The requirements under section 302(b)(2) shall be applied to each shareholder separately and shall be applied only with respect to stock which is issued and outstanding in the hands of the shareholders. Section 302(b)(2) only applies to a redemption of voting stock or to a redemption of both voting stock and other stock. Section 302(b)(2) does not apply to the redemption solely of nonvoting stock (common or preferred). However, if a redemption is treated as an exchange to a particular shareholder under the terms of section 302(b)(2), such section will apply to the simultaneous redemption of nonvoting preferred stock (which is not section 306 stock) owned by such shareholder and such redemption will also be treated as an exchange. Generally, for purposes of this section, stock which does not have voting rights until the happening of an event, such as a default in the payment of dividends on preferred stock, is not voting stock until the happening of the specified event. Subsection 302(b)(2)(D) provides that a redemption will not be treated as substantially disproportionate if made pursuant to a plan the purpose or effect of which is a series of redemptions which result in the aggregate in a distribution which is not substantially disproportionate. Whether or not such a plan exists will be determined from all the facts and circumstances.
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Treas. Reg. §1.302-3(b)§1.302-3(b)
The application of paragraph (a) of this section is illustrated by the following example:
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Treas. Reg. §1.302-4Termination of shareholder's interest
Section 302(b)(3) provides that a distribution in redemption of all of the stock of the corporation owned by a shareholder shall be treated as a distribution in part or full payment in exchange for the stock of such shareholder. In determining whether all of the stock of the shareholder has been redeemed, the general rule of section 302(c)(1) requires that the rules of constructive ownership provided in section 318(a) shall apply. Section 302(c)(2), however, provides that section 318(a)(1) (relating to constructive ownership of stock owned by members of a family) shall not apply where the specific requirements of section 302(c)(2) are met. The following rules shall be applicable in determining whether the specific requirements of section 302(c)(2) are met:
(a) Statement. The agreement specified in section 302(c)(2)(A)(iii) shall be in the form of a statement entitled, “STATEMENT PURSUANT TO SECTION 302(c)(2)(A)(iii) BY [INSERT NAME AND TAXPAYER IDENTIFICATION NUMBER (IF ANY) OF TAXPAYER OR RELATED PERSON, AS THE CASE MAY BE], A DISTRIBUTEE (OR RELATED PERSON) OF [INSERT NAME AND EMPLOYER IDENTIFICATION NUMBER (IF ANY) OF DISTRIBUTING CORPORATION].” The distributee must include such statement on or with the distributee's first return for the taxable year in which the distribution described in section 302(b)(3) occurs. If the distributee is a controlled foreign corporation (within the meaning of section 957), each United States shareholder (within the meaning of section 951(b)) with respect thereto must include this statement on or with its return. The distributee must represent in the statement—
(1) THE DISTRIBUTEE (OR RELATED PERSON) HAS NOT ACQUIRED, OTHER THAN BY BEQUEST OR INHERITANCE, ANY INTEREST IN THE CORPORATION (AS DESCRIBED IN SECTION 302(c)(2)(A)(i)) SINCE THE DISTRIBUTION; and
(2) THE DISTRIBUTEE (OR RELATED PERSON) WILL NOTIFY THE INTERNAL REVENUE SERVICE OF ANY ACQUISITION, OTHER THAN BY BEQUEST OR INHERITANCE, OF SUCH AN INTEREST IN THE CORPORATION WITHIN 30 DAYS AFTER THE ACQUISITION, IF THE ACQUISITION OCCURS WITHIN 10 YEARS FROM THE DATE OF THE DISTRIBUTION.
(b) Substantiation information. The distributee who files an agreement under section 302(c)(2)(A)(iii) shall retain copies of income tax returns and any other records indicating fully the amount of tax which would have been payable had the redemption been treated as a distribution subject to section 301.
(c) Stock of parent, subsidiary or successor corporation redeemed. If stock of a parent corporation is redeemed, section 302(c)(2)(A), relating to acquisition of an interest in the corporation within 10 years after termination shall be applied with reference to an interest both in the parent corporation and any subsidiary of such parent corporation. If stock of a parent corporation is sold to a subsidiary in a transaction described in section 304, section 302(c)(2)(A) shall be applicable to the acquisition of an interest in such subsidiary corporation or in the parent corporation. If stock of a subsidiary corporation is redeemed, section 302(c)(2)(A) shall be applied with reference to an interest both in such subsidiary corporation and its parent. Section 302(c)(2)(A) shall also be applied with respect to an interest in a corporation which is a successor corporation to the corporation the interest in which has been terminated.
(d) Redeemed shareholder as creditor. For the purpose of section 302(c)(2)(A)(i), a person will be considered to be a creditor only if the rights of such person with respect to the corporation are not greater or broader in scope than necessary for the enforcement of his claim. Such claim must not in any sense be proprietary and must not be subordinate to the claims of general creditors. An obligation in the form of a debt may thus constitute a proprietary interest. For example, if under the terms of the instrument the corporation may discharge the principal amount of its obligation to a person by payments, the amount or certainty of which are dependent upon the earnings of the corporation, such a person is not a creditor of the corporation. Furthermore, if under the terms of the instrument the rate of purported interest is dependent upon earnings, the holder of such instrument may not, in some cases, be a creditor.
(e) Acquisition of assets pursuant to creditor's rights. In the case of a distributee to whom section 302(b)(3) is applicable, who is a creditor after such transaction, the acquisition of the assets of the corporation in the enforcement of the rights of such creditor shall not be considered an acquisition of an interest in the corporation for purposes of section 302(c)(2) unless stock of the corporation, its parent corporation, or, in the case of a redemption of stock of a parent corporation, of a subsidiary of such corporation is acquired.
(f) Constructive ownership rules applicable. In determining whether an entire interest in the corporation has been terminated under section 302(b)(3), under all circumstances paragraphs (2), (3), (4), and (5) of section 318(a) (relating to constructive ownership of stock) shall be applicable.
(g) Avoidance of Federal income tax. Section 302(c)(2)(B) provides that section 302(c)(2)(A) shall not apply—
(1) If any portion of the stock redeemed was acquired directly or indirectly within the 10-year period ending on the date of the distribution by the distributee from a person, the ownership of whose stock would (at the time of distribution) be attributable to the distributee under section 318(a), or
(2) If any person owns (at the time of the distribution) stock, the ownership of which is attributable to the distributee under section 318(a), such person acquired any stock in the corporation directly or indirectly from the distributee within the 10-year period ending on the date of the distribution, and such stock so acquired from the distributee is not redeemed in the same transaction,unless the acquisition (described in subparagraph (1) of this paragraph) or the disposition by the distributee (described in subparagraph (2) of this paragraph) did not have as one of its principal purposes the avoidance of Federal income tax. A transfer of stock by the transferor, within the 10-year period ending on the date of the distribution, to a person whose stock would be attributable to the transferor shall not be deemed to have as one of its principal purposes the avoidance of Federal income tax merely because the transferee is in a lower income tax bracket than the transferor.
(h) Effective/applicability date. Paragraph (a) of this section applies to any taxable year beginning on or after May 30, 2006. However, taxpayers may apply paragraph (a) of this section to any original Federal income tax return (including any amended return filed on or before the due date (including extensions) of such original return) timely filed on or after May 30, 2006. For taxable years beginning before May 30, 2006, see § 1.302-4 as contained in 26 CFR part 1 in effect on April 1, 2006.
-
Treas. Reg. §1.302-4(a)Statement.
Statement. The agreement specified in section 302(c)(2)(A)(iii) shall be in the form of a statement entitled, “STATEMENT PURSUANT TO SECTION 302(c)(2)(A)(iii) BY [INSERT NAME AND TAXPAYER IDENTIFICATION NUMBER (IF ANY) OF TAXPAYER OR RELATED PERSON, AS THE CASE MAY BE], A DISTRIBUTEE (OR RELATED PERSON) OF [INSERT NAME AND EMPLOYER IDENTIFICATION NUMBER (IF ANY) OF DISTRIBUTING CORPORATION].” The distributee must include such statement on or with the distributee's first return for the taxable year in which the distribution described in section 302(b)(3) occurs. If the distributee is a controlled foreign corporation (within the meaning of section 957), each United States shareholder (within the meaning of section 951(b)) with respect thereto must include this statement on or with its return. The distributee must represent in the statement—
(1) THE DISTRIBUTEE (OR RELATED PERSON) HAS NOT ACQUIRED, OTHER THAN BY BEQUEST OR INHERITANCE, ANY INTEREST IN THE CORPORATION (AS DESCRIBED IN SECTION 302(c)(2)(A)(i)) SINCE THE DISTRIBUTION; and
(2) THE DISTRIBUTEE (OR RELATED PERSON) WILL NOTIFY THE INTERNAL REVENUE SERVICE OF ANY ACQUISITION, OTHER THAN BY BEQUEST OR INHERITANCE, OF SUCH AN INTEREST IN THE CORPORATION WITHIN 30 DAYS AFTER THE ACQUISITION, IF THE ACQUISITION OCCURS WITHIN 10 YEARS FROM THE DATE OF THE DISTRIBUTION.
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Treas. Reg. §1.302-4(b)Substantiation information.
Substantiation information. The distributee who files an agreement under section 302(c)(2)(A)(iii) shall retain copies of income tax returns and any other records indicating fully the amount of tax which would have been payable had the redemption been treated as a distribution subject to section 301.
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Treas. Reg. §1.302-4(c)Stock of parent, subsidiary or successor corporation redeemed.
Stock of parent, subsidiary or successor corporation redeemed. If stock of a parent corporation is redeemed, section 302(c)(2)(A), relating to acquisition of an interest in the corporation within 10 years after termination shall be applied with reference to an interest both in the parent corporation and any subsidiary of such parent corporation. If stock of a parent corporation is sold to a subsidiary in a transaction described in section 304, section 302(c)(2)(A) shall be applicable to the acquisition of an interest in such subsidiary corporation or in the parent corporation. If stock of a subsidiary corporation is redeemed, section 302(c)(2)(A) shall be applied with reference to an interest both in such subsidiary corporation and its parent. Section 302(c)(2)(A) shall also be applied with respect to an interest in a corporation which is a successor corporation to the corporation the interest in which has been terminated.
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Treas. Reg. §1.302-4(d)Redeemed shareholder as creditor.
Redeemed shareholder as creditor. For the purpose of section 302(c)(2)(A)(i), a person will be considered to be a creditor only if the rights of such person with respect to the corporation are not greater or broader in scope than necessary for the enforcement of his claim. Such claim must not in any sense be proprietary and must not be subordinate to the claims of general creditors. An obligation in the form of a debt may thus constitute a proprietary interest. For example, if under the terms of the instrument the corporation may discharge the principal amount of its obligation to a person by payments, the amount or certainty of which are dependent upon the earnings of the corporation, such a person is not a creditor of the corporation. Furthermore, if under the terms of the instrument the rate of purported interest is dependent upon earnings, the holder of such instrument may not, in some cases, be a creditor.
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Treas. Reg. §1.302-4(e)Acquisition of assets pursuant to creditor's rights.
Acquisition of assets pursuant to creditor's rights. In the case of a distributee to whom section 302(b)(3) is applicable, who is a creditor after such transaction, the acquisition of the assets of the corporation in the enforcement of the rights of such creditor shall not be considered an acquisition of an interest in the corporation for purposes of section 302(c)(2) unless stock of the corporation, its parent corporation, or, in the case of a redemption of stock of a parent corporation, of a subsidiary of such corporation is acquired.
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Treas. Reg. §1.302-4(f)Constructive ownership rules applicable.
Constructive ownership rules applicable. In determining whether an entire interest in the corporation has been terminated under section 302(b)(3), under all circumstances paragraphs (2), (3), (4), and (5) of section 318(a) (relating to constructive ownership of stock) shall be applicable.
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Treas. Reg. §1.302-4(g)Avoidance of Federal income tax.
Avoidance of Federal income tax. Section 302(c)(2)(B) provides that section 302(c)(2)(A) shall not apply—
(1) If any portion of the stock redeemed was acquired directly or indirectly within the 10-year period ending on the date of the distribution by the distributee from a person, the ownership of whose stock would (at the time of distribution) be attributable to the distributee under section 318(a), or
(2) If any person owns (at the time of the distribution) stock, the ownership of which is attributable to the distributee under section 318(a), such person acquired any stock in the corporation directly or indirectly from the distributee within the 10-year period ending on the date of the distribution, and such stock so acquired from the distributee is not redeemed in the same transaction,unless the acquisition (described in subparagraph (1) of this paragraph) or the disposition by the distributee (described in subparagraph (2) of this paragraph) did not have as one of its principal purposes the avoidance of Federal income tax. A transfer of stock by the transferor, within the 10-year period ending on the date of the distribution, to a person whose stock would be attributable to the transferor shall not be deemed to have as one of its principal purposes the avoidance of Federal income tax merely because the transferee is in a lower income tax bracket than the transferor.
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Treas. Reg. §1.302-4(h)Effective/applicability date.
Effective/applicability date. Paragraph (a) of this section applies to any taxable year beginning on or after May 30, 2006. However, taxpayers may apply paragraph (a) of this section to any original Federal income tax return (including any amended return filed on or before the due date (including extensions) of such original return) timely filed on or after May 30, 2006. For taxable years beginning before May 30, 2006, see § 1.302-4 as contained in 26 CFR part 1 in effect on April 1, 2006.
222 Citing Cases
302 (1998); see also Nimmer, supra, sec. 9.10[A][1]. The author has recapture rights that allow the termination of a license to a third party beginning 35 years after the date of grant.29 17 U.S.C. sec. 203(a)(3) (2002); see also TD Bank N.A. v. Hill, 928 F.3d 259, 273 (3d Cir. 2019). B. Performer Jackson was even more famous as a performer th
n first and as recovery of basis only to the extent that the boot exceeds the transferor's realized gain. If the transaction were taxed in accordance with its form, the redemption of petitioner's stock would be tested for dividend equivalence under section 302. If, as our calculations indicate, CMH continued to own after the redemption a -66- [*66] majority of petitioner's voting stock, the redemption would likely not qualify for exchange treatment under section 302(b). See, e.g., Rev. Rul. 78-4
Unlike BFA, USFA used domestic financial accounts as well as a new “blocker entity” called Counselor Capital. Counselor Capital would return 47 Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), Pub. L. No. 107-56, sec. 302, 115 Stat.
n first and as recovery of basis only to the extent that the boot exceeds the transferor's realized gain. If the transaction were taxed in accordance with its form, the redemption of petitioner's stock would be tested for dividend equivalence under section 302. If, as our calculations indicate, CMH continued to own after the redemption a -66- [*66] majority of petitioner's voting stock, the redemption would likely not qualify for exchange treatment under section 302(b). See, e.g., Rev. Rul. 78-4
at 296-98. - 101 - [*101] funds to clients--funds which the clients had already deposited in a domestic account--in the form of loans. A client of R&A would, for example, draft a letter to Ryder requesting that he (and the firm) “facilitate a loan * * * from my segregated investment account” to him. USFA was generally used by R
at 296-98. - 101 - [*101] funds to clients--funds which the clients had already deposited in a domestic account--in the form of loans. A client of R&A would, for example, draft a letter to Ryder requesting that he (and the firm) “facilitate a loan * * * from my segregated investment account” to him. USFA was generally used by R
at 296-98. - 101 - [*101] funds to clients--funds which the clients had already deposited in a domestic account--in the form of loans. A client of R&A would, for example, draft a letter to Ryder requesting that he (and the firm) “facilitate a loan * * * from my segregated investment account” to him. USFA was generally used by R
at 296-98. - 101 - [*101] funds to clients--funds which the clients had already deposited in a domestic account--in the form of loans. A client of R&A would, for example, draft a letter to Ryder requesting that he (and the firm) “facilitate a loan * * * from my segregated investment account” to him. USFA was generally used by R
members. The same handful ofemployees that managed those programs absorbed the FSC activities into their routines. - 9 - section 408A Roth IRAs (Roth IRAs) were added to the Code in August 1997, see Taxpayer ReliefAct of 1997, Pub. L. No. 105-34, sec. 302, 111 Stat. at 825, WGA changed its program, substituting Roth IRAs for traditional IRAs. WGA marketed its FSC/IRA program to its members, emphasizing that the FSC/IRA structure would provide tax benefits without any loss ofcontrol over the bus
at 760, section 1(h)(11) makes preferential tax rates available for QDI.4 QDI includes dividends received during the taxable year from "domestic corporations" and "qualified foreign corporations." Sec. 1(h)(11)(B)(i). A "qualified foreign corporation" is a corporation that is "incorporated in a possession ofthe United States" or
members. The same handful ofemployees that managed those programs absorbed the FSC activities into their routines. - 9 - section 408A Roth IRAs (Roth IRAs) were added to the Code in August 1997, see Taxpayer ReliefAct of 1997, Pub. L. No. 105-34, sec. 302, 111 Stat. at 825, WGA changed its program, substituting Roth IRAs for traditional IRAs. WGA marketed its FSC/IRA program to its members, emphasizing that the FSC/IRA structure would provide tax benefits without any loss ofcontrol over the bus
Unlike the court in McGraw, we conclude that the stock sale did not make the shareholders direct transferees ofBNP. Minn. Stat. Ann. section 302A.781 subdiv.
Unlike the court in McGraw, we conclude that the stock sale did not make the shareholders direct transferees ofBNP. Minn. Stat. Ann. section 302A.781 subdiv.
hat the redemptions caused no -12- meaningful reduction ofits ownership interest; and hence that the redemptions constituted "dividends" as the taxpayer contended. Petitioners err in relying on Boise Cascade. The operative Code provision there was section 302. Section 302 is part ofsubchapter C, and the rules ofsec- tion 318 are expressly made applicable to section 302. See sec. 302(c) ("[S]ection 318(a) shall apply in determining the ownership ofstock for purposes ofthis sec- tion."). The opera
Unlike the court in McGraw, we conclude that the stock sale did not make the shareholders direct transferees ofBNP. Minn. Stat. Ann. section 302A.781 subdiv.
hat the redemptions caused no -12- meaningful reduction ofits ownership interest; and hence that the redemptions constituted "dividends" as the taxpayer contended. Petitioners err in relying on Boise Cascade. The operative Code provision there was section 302. Section 302 is part ofsubchapter C, and the rules ofsec- tion 318 are expressly made applicable to section 302. See sec. 302(c) ("[S]ection 318(a) shall apply in determining the ownership ofstock for purposes ofthis sec- tion."). The opera
Conclusion For these reasons we hold that the payments to JC Export were not DISC commissions, but rather dividends to Summa's shareholders followed by - 24 - [*24] contributions to the Benenson Roth IRAs.
Conclusion For these reasons we hold that the payments to JC Export were not DISC commissions, but rather dividends to Summa's shareholders followed by - 24 - [*24] contributions to the Benenson Roth IRAs.
Conclusion For these reasons we hold that the payments to JC Export were not DISC commissions, but rather dividends to Summa's shareholders followed by - 24 - [*24] contributions to the Benenson Roth IRAs.
Conclusion For these reasons we hold that the payments to JC Export were not DISC commissions, but rather dividends to Summa's shareholders followed by - 24 - [*24] contributions to the Benenson Roth IRAs.
The insured died one month later and her estate claimed that the life insurance proceeds were exempt from estate tax under section 302 ofthe Revenue Act of 1926, 44 Stat.
Conclusion For these reasons we hold that the payments to JC Export were not DISC commissions, but rather dividends to Summa's shareholders followed by - 24 - [*24] contributions to the Benenson Roth IRAs.
. II. Excess Contributions to the Roth IRAs and Related Determinations A. Roth IRAs in General Congress authorized the Roth IRA, a type ofa retirement account, with the enactment ofsection 408A ofthe TaxpayerReliefAct of 1997(Pub. L. No.-105- s 34, sec. 302, 111 Stat. at 825. The distinguishing feature ofa Roth IRA is thea back-end timing ofthe tax benefit: Contributions to a Roth IRA are not tax deductible, but alliearnings accumulate tax free, and all qualified distributions are tax free. Sec.
. II. Excess Contributions to the Roth IRAs and Related Determinations A. Roth IRAs in General Congress authorized the Roth IRA, a type ofa retirement account, with the enactment ofsection 408A ofthe TaxpayerReliefAct of 1997(Pub. L. No.-105- s 34, sec. 302, 111 Stat. at 825. The distinguishing feature ofa Roth IRA is thea back-end timing ofthe tax benefit: Contributions to a Roth IRA are not tax deductible, but alliearnings accumulate tax free, and all qualified distributions are tax free. Sec.
760, the distinction between dividend income and other ordinary income was of little import, all of it being taxed at the same rate. - 16 - position otherwise inconsistent with con rolling statutory provisions . " Montgomery v . Commissioner , 127 T . C. 43, 65 (2006) ; see .Johnson v. Commissioner, 620 F.2d 153, 155 (7th Cir.
Because the normal deficiency procedures apply to affected items that require partner.-level determinations, we hold that the deficiency notice is validand we have jurisdiction to redetermine the deficiency .
and the subsequent purchase of the shares by Arrow should be treated as a single integrated transaction resulting in exchange treatment under section 302(a ) or as a series of independent transactions resulting in a dividend to petitioner under sections 301(a) and 302(b)(1) .
According to petitioner, the specific reference in section 304 (a) (1) (B) to "person (or persons) so in control" requires the interests of all persons in control to be considered in applying section 302(b) (3).
who receive property in exchange for their transferred stock. Accordingly, under section 304, the persons in control must actually receive property in exchange for the transfer of their issuing corporation stock to warrant the redemption analysis in section 302. The references to “persons” in section 304(a), when read in conjunction with section 304(c)(1) and (3), merely indicate that the interests of more than one person may be combined through attribution of stock ownership in order to meet th
The Code treats some redemptions as sales under section 302, but others as a payment of dividends to the extent the corporation has retained earnings and profits, with any excess as a return of the shareholder’s basis, and any excess over basis as a capital gain.
oes not involve the exercise of judgment or discretion, and that occurs during the processing of a taxpayer’s case after all prerequisites to the 5(...continued) requests for abatement after July 30, 1996. Taxpayer Bill of Rights 2, Pub. L. 104-168, sec. 302, 110 Stat. 1457 (1996). - 12 - act, such as conferences and review by supervisors, have taken place.” The final regulations under section 6404(e) provide the same definition. See sec. 301.6404-2(b)(2), Proced. & Admin. Regs.6 The final regul
petitioners assert that delay resulted when the OIC was returned to them by the IRS for reasons 3 Sec. 6404(h), formerly sec. 6404(g), is applicable to requests for abatement after July 30, 1996. Taxpayer Bill of Rights 2 (TBOR 2), Pub. L. 104-168, sec. 302, 110 Stat. 1457 (1996). Further, sec. 301(a)(1) and (2) of TBOR 2 permits abatement of interest with respect to unreasonable error or delay from “managerial” acts, effective for interest accruing with respect to tax years beginning after Jul
The Code treats some redemptions as sales under section 302, but others as a payment of dividends to the extent the corporation has retained earnings and profits, with any excess as a return of the shareholder’s basis, and any excess over basis as a capital gain.
302.7122-1T(b)(4)(i), Temporary Proced. & Admin. Regs., supra. Economic hardship is defined as the inability of the taxpayer to pay his or her reasonable living expenses. Sec. 301.6343-1(b)(4), Proced. & Admin. Regs. Throughout the consideration of their OIC, petitioners maintained that they do not have sufficient income to pay their liabiliti
that (1) strict compliance with the timely filing condition would result in an extreme forfeiture or penalty, and (2) timely filing was not an essential part of the bargain. See 2 Restatement, Contracts 2d, sec. 229 (1981); 1 Restatement, Contracts, sec. 302 (1932). If we are going to say that, as a matter of law, the Appeals officer should not have enforced the 8 While the majority assumes that Arkansas law governs the contract issue, it is quite possible that, under principles set forth in Cle
302.7122-1T(b)(4)(i), Temporary Proced. & Admin. Regs., supra. Economic hardship is defined as the inability of the taxpayer to pay his or her reasonable living expenses. Sec. 301.6343-1(b)(4), Proced. & Admin. Regs. Throughout the consideration of their OIC, petitioners maintained that they do not have sufficient income to pay their liabiliti
302 (effective date based on time of request for interest abatement). Even if we had a general power of judicial correction, this close proximity of different effective dates shows that Congress did pay attention to such provisions and was capable of making a different choice if it had wished. 5 Petitioner argues that applying the effective da
17 T.C. 781 (1951), and Soreng v. Commissioner, 158 F.2d 340 (7th Cir. 1946), affg. 4 T.C. 870 (1945). Both of those cases involved the declaration of a dividend, and not the purported issuance and the purported . immediate redemption of stock under section 302. Estate of Crellin and Soreng are materially distinguishable from the instant case and do not constitute substantial authority for "Instead of having petitioner purportedly contribute money to ITC and having ITC declare a dividend payable
tims of Terrorism Tax Relief Act of 2001, Pub. L. 107-134, sec. 112(d)(1)(B), 115 Stat. 2435 (2002). 3 Sec. 6404(i), as cited throughout this opinion, was originally enacted as sec. 6404(g) by the Taxpayer Bill of Rights 2 (TBOR 2), Pub. L. 104-168, sec. 302, 110 Stat. 1457 (1996). Sec. 6404(g) was redesignated sec. 6404(i) by the Internal Revenue Service Restructuring & Reform Act of 1998, Pub. L. 105- 206, secs. 3305(a), 3309(a), 112 Stat. 743, 745. - 3 - related to the taxable years 1982 thro
Because the 1986 cross-chain sale (the deemed section 304 redemption), when integrated with the sale of ML Leasing's stock, resulted in the complete termination of ML Leasing's actual and constructive ownership interest in Merlease (the issuing corporation), see section 304 (b), we hold that the redemption qualified under section 302 (b) (3), and that, therefore, the redemption shall be treated as a payment in exchange for stock under section 302(a) and not as a dividend under section 301.
sources of the place of public accommodation, and the effect of the action on its expenses and resources; and (3) The type of operations of the place of public accommodation, and the impact of the action on its operations. Id. Cases discussing ADA sec. 302, 104 Stat. 355, 42 U.S.C. sec. 12182(b)(2)(A)(ii), make it clear that determining whether expenditures and modifications by service providers would be reasonable constitutes a fact and case specific test. As explained in Staron v. McDonald’s C
The pertinent part of section 304(a)(1) provides that, for purposes of section 302, if one or more persons are in control of each of two corporations, and in return for property, one of the corporations acquires stock in the other corporation from the person so in control, then such property shall be treated as a distribution in redemption of the stock of the corporation acquiring such stock.
We disagree with petitioners’ contention.
We disagree with petitioners’ contention.
Petitioners contend that respondent erred by relying on the UFTA to determine whether the transfer was fraudulent rather than section 302A.551 of the Minnesota Model Business Corporation Act (MBCA), Minn.
302A.467 (West 1985) and Minn. Stat. Ann. sec. 302A.751 (West Supp. 2001), which discuss equitable relief and shareholder suits. - 27 - Dart’s loan obligations to HL or HS. In the end, the parties would have advanced no further nor taken any steps back from where they had started. In any event, the minority shareholders of Dart were petitione
Petitioners contend that respondent erred by relying on the UFTA to determine whether the transfer was fraudulent rather than section 302A.551 of the Minnesota Model Business Corporation Act (MBCA), Minn.
Discussion Section 304 mandates that certain transactions involving shares in related corporations be recast for tax purposes as redemptions, the tax treatment of which is then governed by section 302 and potentially section 301.
year 1993 for the period from Aug. 22, 1996, to July 7, 1997. This matter is discussed infra in subdivision E of our Findings of Fact. 3 Sec. 6404(i) was originally enacted as sec. 6404(g) by the Taxpayer Bill of Rights 2 (TBOR 2), Pub. L. 104-168, sec. 302, 110 Stat. 1452, 1457-1458 (1996). Sec. 6404(g) was redesignated sec. 6404(i) by the Internal Revenue Service Restructuring & Reform Act of 1998, Pub. L. 105-206, secs. 3505(a), 3309(a), 112 Stat. 685, 743, 745 (1998). However, Tit. XXVII of
Instead, son’s exercise of the option was either a bona fide sale for adequate and full consideration or, like Wilson and Lomb, completely outside the scope of section 302 of the Revenue Act of 1926.
302A.751(1)(b)(2). Unfairly prejudicial conduct has also been further defined as “conduct that frustrates the reasonable expectations of shareholders in their capacity as shareholders or directors of a corporation that is not publicly held or as officers or employees of a closely held corporation.” Berreman v. W. Publg. Co., 615 N.W.2d 362, 37
Instead, son’s exercise of the option was either a bona fide sale for adequate and full consideration or, like Wilson and Lomb, completely outside the scope of section 302 of the Revenue Act of 1926.
ers regarding the allocation of a $3 million distribution to be made by IWF. Petitioner sued the other partners in order to resolve the 2 Sec. 6404(i) was originally enacted as sec. 6404(g) by the Taxpayer Bill of Rights 2 (TBOR 2), Pub. L. 104-168, sec. 302, 110 Stat. 1457 (1996). Sec. 6404(g) was redesignated as sec. 6404(i) by the Internal Revenue Service Restructuring & Reform Act of 1998, Pub. L. 105-206, secs. 3505(a), 3309(a), 112 Stat. 743, 745. However, Title XXVII of the Tax Court Rule
Discussion Section 304 mandates that certain transactions involving shares in related corporations be recast for tax purposes as redemptions, the tax treatment of which is then governed by section 302 and potentially section 301.
32868, supra, determines that the cash redemption of - 21 - preferred stock from shareholders of both common and preferred, in connection with the acquisition of all of the common stock in a tax-free reorganization under section 368(a)(1)(C), is taxable to the shareholders under section 302 as a transaction separate from the reorganization.
We disagree with petitioner’s interpretation of the word “nonmember” in section 1.1502-14(d)(4)(i), Income Tax Regs., because it reads that word out of context and in isolation.
32868, supra, determines that the cash redemption of - 21 - preferred stock from shareholders of both common and preferred, in connection with the acquisition of all of the common stock in a tax-free reorganization under section 368(a)(1)(C), is taxable to the shareholders under section 302 as a transaction separate from the reorganization.
32868, supra, determines that the cash redemption of - 21 - preferred stock from shareholders of both common and preferred, in connection with the acquisition of all of the common stock in a tax-free reorganization under section 368(a)(1)(C), is taxable to the shareholders under section 302 as a transaction separate from the reorganization.
Free” Exchange The heading to section 1.1502-14(d)(4), Income Tax Regs., refers to obligations acquired in “tax-free exchanges”. Petitioner argues that the 1977 stock redemption was not a tax-free exchange because stock redemptions are taxable under section 302. It is well settled that the heading of a section does not limit the plain meaning of the text. See Brotherhood of R.R. Trainmen v. Baltimore & O.R. Co., 331 U.S. 519, 529 (1947); Warren v. Commissioner, 114 T.C. 343, 347 (2000). The text
32868, supra, determines that the cash redemption of preferred stock from shareholders of both common and preferred, in connection with the acquisition of all of the common stock in a tax-free reorganization under section 368(a)(1)(C), is taxable to the shareholders under section 302 as a transaction separate from the reorganization.
Only a defined benefit plan subject to the minimum funding standards of section 412 and ERISA section 302, 88 Stat.
Furthermore, while section 6404(g), added by section 302 of the Taxpayer Bill of Rights 2, Pub.
As such, we must decide whether TBOR 2 section 302 confers jurisdiction to review the denial of the requests for abatement of interest in this case.
New section 6404(g), added to the Internal Revenue Code by section 302 of the Taxpayer Bill of Rights 2, Pub.
As such, we must decide whether TBOR 2 section 302 confers jurisdiction to review the denial of the requests for abatement of interest in this case.
302 (1973)); Commonwealth v. Kuykendall, 318 Pa. Super. 429, 465 A.2d 29 (1983); Commonwealth v. Shaffer, 279 Pa. Super. 18, 420 A.2d 722 (1980). - 35 - Respondent contends that to prove "theft" under Pennsylvania law "the mind of a thief" is relevant and that it must be shown that there was a specific criminal intent to permanently deprive t
Schedule B of Form 5500 is required to be filed only with respect to a defined benefit plan that is subject to the minimum funding standards of section 412 and ERISA section 302, 88 Stat.
New section 6404(g), added to the Internal Revenue Code by section 302 of the Taxpayer Bill of Rights 2, Pub.
Under section 302, a redemption transaction is either treated as an exchange whereby section 1001 applies, or as a distribution of property whereby section 301, outlined above, applies. If the redemption transaction is treated as an exchange, the amount realized is the sum of any money received plus the “fair market value” of the property received. Sec.
y will be found when it is appropriate to recognize a right to performance in the third party and the circumstances indicate that the promisee intends to give the third party the benefit of the promised performance. Restatement (Second) of Contracts § 302 (1981). New York has adopted the Restatement approach in determining whether a third party beneficiary exists. Septembertide Publishing, B.V. v. Stein & Day, Inc., 884 F.2d 675, 679 (2d Cir 1989); Fourth Ocean Putnam Corp. v. Interstate Wreckin