Sam owns 80 percent of the stock of Club Corporation. Unrelated individuals own the remaining 20...
Sam owns 80 percent of the stock of Club Corporation. Unrelated individuals own the remaining 20 percent. For a stock redemption of Sam's stock to be treated as an exchange under the "substantially disproportionate" test, what percentage of Club stock must Sam own after the redemption?
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Any percentage less than 64 percent.
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Any percentage less than 50 percent.
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Any percentage less than 80 percent.
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All stock redemptions involving individuals are treated as exchanges.
Homework Answers
Under 302(b)2, Sam must own less than the lesser of(1) 80%*64%=50% or(2) 80%
any percentage less than 80 percent
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Sam owns 80 percent of the stock of Club Corporation. Unrelated
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