IRS PLR: Distribution to Redeem Stock Not Equivalent to Dividend (IRC §302)

A corporation’s repurchase of its stock from a shareholder will qualify as a redemption not essentially equivalent to a dividend within the meaning of tax code Section 302(b)(1), the IRS ruled, explaining that the amount distributed will be treated as a distribution in full payment in exchange for the two classes of shares redeemed, as provided in Section 302(a). [PLR 201918009]

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