- Home
- Books and Journals
- The Missouri Bar
- Business Transitions Deskbook
- Chapter 2 Tax Law Governing Internal Corporate Readjustments
Section 5 Complete Termination of Interest Redemptions
Library | Bus Trans 2005 |
I.R.C. § 302(b)(3) provides that a redemption will be treated as an exchange (and thus qualifies for capital gain or loss, provided the stock is a capital asset in the hands of the redeeming shareholder) “if the redemption is in complete redemption of all of the stock of the corporation owned by the shareholder.” The I.R.C. § 318 attribution of ownership rules apply in making this determination. See §§2.7–2.13, infra.
If a shareholder would qualify under the I.R.C. § 302(b)(3) complete termination of interest rule but for the fact that, under I.R.C. § 318(a)(1), the shareholder is considered to own stock owned by the shareholder’s spouse, children, grandchildren, or parents, these family attribution rules may be waived so the redemption can otherwise qualify under I.R.C. § 302(b)(3). The waiver rule applies only to family attribution. The waiver rule does not apply to other attribution under I.R.C. § 318, e.g., estate, trust, corporation, or other entity attribution.
The I.R.C. § 302(c)(2) waiver of attribution rules have the following requirements:
- 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 [in the corporation] (other than stock acquired by bequest or inheritance) within 10 years from the date of such distribution, and
- the distributee . . . files an agreement to notify the Secretary of any acquisition described in clause (ii) and to retain such records [of the transaction]
I.R.C. § 302(c)(2)(A)(i)–(iii).
Treasury Regulation § 1.302-4 sets forth the requirements for the waiver agreement that must be attached to the redeeming shareholder’s tax return. There is no official form.
In addition, the requirements of I.R.C. § 302(c)(2)(B), relating to situations involving stock transfers to or from related parties during the preceding ten-year period, must be satisfied. These rules are discussed below.
All aspects of these rules must be satisfied.
The Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. No. 97-248, 96 Stat. 324, extended these rules to allow waiver of the family attribution rules by entities (e.g., partnerships, estates, trusts, or corporations) if each related person (e.g., beneficiary or other person who is attributed ownership to the entity under I.R.C. § 318(a)(2)) joins in the waiver agreement. See I.R.C. § 302(c)(2)(C)...
To continue reading
Request your trial- Business Transitions Deskbook
- Chapter 2 Tax Law Governing Internal Corporate Readjustments
- Section 1 Scope and Purpose of Chapter
- Section 2 General Rules
- Section 3 Redemptions Not Essentially Equivalent to a Dividend
- Section 4 Substantially Disproportionate Redemptions
- Section 5 Complete Termination of Interest Redemptions
- Section 6 Distributions in Partial Liquidations
- Section 7 Scope of I.R.C. 318
- Section 8 Family Attribution Rules
- Section 9 Attribution of Ownership Between Partnerships and Partners
- Section 10 Attribution of Ownership Between Trusts and Beneficiaries
- Section 11 Attribution of Ownership Between Estates and Beneficiaries
- Section 20 Application of Stock Dividend Rules to Redemptions and I.R.C. 306 Rules
- Section 27 Treatment to Corporation
- Section 28 Formation of a Subsidiary
- Section 29 Liquidation of a Subsidiary
- Section 30 Definition of a Recapitalization
- Section 31 Types of Recapitalizations and Collateral Issues
- Section 32 Recognition of Gain or Loss
- Section 33 Character of Gain Recognized
- Section 34 Basis to Stockholders
- Section 35 Creation of I.R.C. 306 Stock
- Section 36 Impact on Corporations Earnings and Profits
- Section 37 Application of Stock Distribution Rules to Recapitalizations
- Section 49 Using I.R.C. 355 to Dispose of Assets
- Section 50 Missouri Tax Implications of Internal Corporate Readjustments
Subscribers can access the reported version of this case.
You can sign up for a trial and make the most of our service including these benefits.
Why Sign-up to vLex?
-
Over 100 Countries
Search over 120 million documents from over 100 countries including primary and secondary collections of legislation, case law, regulations, practical law, news, forms and contracts, books, journals, and more.
-
Thousands of Data Sources
Updated daily, vLex brings together legal information from over 750 publishing partners, providing access to over 2,500 legal and news sources from the world’s leading publishers.
-
Find What You Need, Quickly
Advanced A.I. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research.
-
Over 2 million registered users
Founded over 20 years ago, vLex provides a first-class and comprehensive service for lawyers, law firms, government departments, and law schools around the world.
Subscribers are able to see a list of all the cited cases and legislation of a document.
You can sign up for a trial and make the most of our service including these benefits.
Why Sign-up to vLex?
-
Over 100 Countries
Search over 120 million documents from over 100 countries including primary and secondary collections of legislation, case law, regulations, practical law, news, forms and contracts, books, journals, and more.
-
Thousands of Data Sources
Updated daily, vLex brings together legal information from over 750 publishing partners, providing access to over 2,500 legal and news sources from the world’s leading publishers.
-
Find What You Need, Quickly
Advanced A.I. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research.
-
Over 2 million registered users
Founded over 20 years ago, vLex provides a first-class and comprehensive service for lawyers, law firms, government departments, and law schools around the world.
Subscribers are able to see a list of all the documents that have cited the case.
You can sign up for a trial and make the most of our service including these benefits.
Why Sign-up to vLex?
-
Over 100 Countries
Search over 120 million documents from over 100 countries including primary and secondary collections of legislation, case law, regulations, practical law, news, forms and contracts, books, journals, and more.
-
Thousands of Data Sources
Updated daily, vLex brings together legal information from over 750 publishing partners, providing access to over 2,500 legal and news sources from the world’s leading publishers.
-
Find What You Need, Quickly
Advanced A.I. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research.
-
Over 2 million registered users
Founded over 20 years ago, vLex provides a first-class and comprehensive service for lawyers, law firms, government departments, and law schools around the world.
Subscribers are able to see the revised versions of legislation with amendments.
You can sign up for a trial and make the most of our service including these benefits.
Why Sign-up to vLex?
-
Over 100 Countries
Search over 120 million documents from over 100 countries including primary and secondary collections of legislation, case law, regulations, practical law, news, forms and contracts, books, journals, and more.
-
Thousands of Data Sources
Updated daily, vLex brings together legal information from over 750 publishing partners, providing access to over 2,500 legal and news sources from the world’s leading publishers.
-
Find What You Need, Quickly
Advanced A.I. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research.
-
Over 2 million registered users
Founded over 20 years ago, vLex provides a first-class and comprehensive service for lawyers, law firms, government departments, and law schools around the world.
Subscribers are able to see any amendments made to the case.
You can sign up for a trial and make the most of our service including these benefits.
Why Sign-up to vLex?
-
Over 100 Countries
Search over 120 million documents from over 100 countries including primary and secondary collections of legislation, case law, regulations, practical law, news, forms and contracts, books, journals, and more.
-
Thousands of Data Sources
Updated daily, vLex brings together legal information from over 750 publishing partners, providing access to over 2,500 legal and news sources from the world’s leading publishers.
-
Find What You Need, Quickly
Advanced A.I. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research.
-
Over 2 million registered users
Founded over 20 years ago, vLex provides a first-class and comprehensive service for lawyers, law firms, government departments, and law schools around the world.
Subscribers are able to see a visualisation of a case and its relationships to other cases. An alternative to lists of cases, the Precedent Map makes it easier to establish which ones may be of most relevance to your research and prioritise further reading. You also get a useful overview of how the case was received.
Why Sign-up to vLex?
-
Over 100 Countries
Search over 120 million documents from over 100 countries including primary and secondary collections of legislation, case law, regulations, practical law, news, forms and contracts, books, journals, and more.
-
Thousands of Data Sources
Updated daily, vLex brings together legal information from over 750 publishing partners, providing access to over 2,500 legal and news sources from the world’s leading publishers.
-
Find What You Need, Quickly
Advanced A.I. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research.
-
Over 2 million registered users
Founded over 20 years ago, vLex provides a first-class and comprehensive service for lawyers, law firms, government departments, and law schools around the world.
Subscribers are able to see the list of results connected to your document through the topics and citations Vincent found.
You can sign up for a trial and make the most of our service including these benefits.
Why Sign-up to vLex?
-
Over 100 Countries
Search over 120 million documents from over 100 countries including primary and secondary collections of legislation, case law, regulations, practical law, news, forms and contracts, books, journals, and more.
-
Thousands of Data Sources
Updated daily, vLex brings together legal information from over 750 publishing partners, providing access to over 2,500 legal and news sources from the world’s leading publishers.
-
Find What You Need, Quickly
Advanced A.I. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research.
-
Over 2 million registered users
Founded over 20 years ago, vLex provides a first-class and comprehensive service for lawyers, law firms, government departments, and law schools around the world.