On our sister website, Tax-Charts.com, we have published a flowchart of distributions in redemption of stock under Code § 302. Redemptions of stock can be treated either as sales/exchanges or as Code § 301 distributions. The flowchart leads the user, step-by-step, through the process of determining whether the redemption should be treated as a sale/exchange or as a Code § 301 distribution.
The flowchart covers the substantially disproportionate rules of Code § 302(b)(2) as well as the family attribution rules of Code §§ 302(b)(3) and 302(c), and more.
The flowchart is available for free. Students taking corporate tax classes may be particularly interested in studying the flowchart.
Andrew Mitchel is an international tax attorney who advises businesses and individuals with cross-border activities.