redeem

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Redemption

1. In bonds, the act of an issuer repurchasing a bond at or before maturity. Redemption is made at the face value of the bond unless it occurs before maturity, in which case the bond is bought back at a premium to compensate for lost interest. The issuer has the right to redeem the bond at any time, although the earlier the redemption take place, the higher the premium usually is. This provides an incentive for companies to do this as rarely as possible.

2. The act of the issuing company repurchasing stocks or mutual funds. In the case of mutual funds, the repurchase is made at net asset value per share. Stocks may be redeemed in cash or by proration. See also: Proratable factor.

redeem

(1) In mortgages, to cure a default by paying all past-due sums and penalties after receiving notice of default, but before acceleration. (2) To exercise the post-foreclosure right of redemption, if allowed. (3) Under federal law, the IRS has 120 days after foreclosure to purchase property on which it had a lien—to redeem the property. (It rarely does this,and would only do so if it believed it could sell the property at a profit large enough to justify the time and trouble.)

References in periodicals archive ?
The divorce decree provided for the corporation to redeem Mrs.
This can be accomplished by making sure the property settlement stipulates that the corporation will redeem the transferring spouse's stock and that the transfer is not on the nontransferring spouse's behalf.
However, for various financial reasons, neither shareholder wants Basic to redeem all of Bert's stock.
Assume that Basic will redeem 300 shares from Bert.
J redeems $150,000 of its stock from the estate in the first year of estate administration and the remaining $250,000 in the second year.
303, distributions in redemption of stock to pay death taxes, allows an estate that owns stock or beneficiaries who inherit stock to redeem shares with minimal (if any) income tax ramifications; such a transaction may be necessary to generate cash to pay certain death taxes and estate expenses.
Then, when A redeems the estate's 80% stock interest, the transaction will qualify for sale treatment under Sec.
Shareholder buy-sell agreements often contain provisions requiring the corporation to redeem a shareholder's interest on his death.
If T is able to redeem 75% of A's stock prior to P's acquisition of the remaining 25% of the T stock, the final regulation appears to provide that the COI requirement for P's acquisition will be satisfied.