Unformatted text preview: for tax treatment? Explain your response. After reading this weeks materi as l I learned that for the Corporate shareholders their stock redemption is treated as dividends; while the noncorporate shareholders stock redemption are treated as a sale. They do not have the same tax preferences, and the stock redemption that have been treated as a sale will have capital gains that may be offset by capital losses and the basis of the shares redeemed reduces the amount of income recognized. However the stock redemption treated as dividend basis of the shares redeemed will not reduce the dividend amount. Reference: Anderson, Pope, and Kramer (2011), Prentice Hall’s Federal Taxation 2011: Corporations, Partnership, Estates & Trusts, Pearson Education, Inc...
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- Spring '09
- stock redemption, Estates & Trusts, shareholders stock redemption