The Ninth Circuit wrote, "[i]n short, the question of whether the distributions to Participants in this case are deductible dividends under 404(k) depends on whether the Trust or the Participants owned the convertible preferred stock when the redemptions
These conflicting decisions have created a state of confusion on how section 1041 applies to divorce-related stock redemptions
16 ~PRNewswire~ -- Oakwood Homes Corporation (NYSE: OH) announced today that it plans to call for redemption
all of its 6 1~2 percent convertible subordinated debentures due 2012, of which approximately $26,800,000 aggregate principal amount are currently outstanding.
HOUSTON -- Hanover Compressor Company (NYSE:HC) announced today the call for redemption
on February 28, 2007, of $29,897,000 aggregate principal amount of the Convertible Junior Subordinated Debentures Due 2029 (the "Debentures").
This provision is supposed to facilitate seller-financed stock redemptions
One such transaction is the redemption
of stock by a corporation.
THE EXERCISE OF THE CALL WARRANTS IS CONDITIONAL UPON RECEIPT BY THE TRUSTEE OF THE WARRANT EXERCISE PURCHASE PRICE WITH RESPECT TO SUCH EXERCISE ON THE REDEMPTION
The tax adviser has to consider how divorce transfers and transactions affect tax liability and basis, including stock redemptions
, transfers in trust, qualified plans and property distributions.
The major advantage of a redemption
is its simplicity; only the corporation and the deceased stockholder are involved.
In the preamble to the proposed regulations, the IRS noted the need for regulatory guidance, given the uncertainty created by the courts on marital-retted stock redemptions
Generally, there are three types of buy-sell agreements: redemption
agreements (also called entity agreements), cross-purchase agreements and combination agreements.
356 test of the final regulations difficult to apply with certainty for pre-reorganization redemptions