IRS to Track Brokerage Accounts for Stock Buyback Excise Tax

The IRS will track each brokerage account, not each shareholder, for an exception to repurchase treatment of the stock buyback excise tax, an official said Tuesday.

Public companies are subject to the 1% excise tax on corporate stock repurchases that started in January.

The guidance released in December outlined redemptions that will not be treated as a repurchase for the tax: deemed redemptions under Section 304(a)(1) and certain payments of cash in lieu of fractional shares.

• Guidance will clarify the IRS will track each brokerage account instead of each shareholder for payments in cash instead of fractional share, said Marie ...