Chapter 16 - Corporate Redemptions and Liquidations Flashcards
1
Q
Stock redemption is
A
When a corporation acquires its own stock from a shareholder in exchange for property.
2
Q
When is a stock redemption treated as a sale or gain ( loss ) ?
A
1) Redemption is not essentially equivalent to a dividend
2) Redemption is substantially disproportionate
3) Distribution is in complete redemption of all of a SH’s stock in the corporation
4) Distribution is to a noncorporate SH in partial liquidation
5) Distribution is received by an estate
3
Q
When does a corporation recognize OI from a distribution of depreciated property?
A
whichever is lessor: depreciation or amount realized
