Code of Federal Regulations (Last Updated: July 5, 2024) |
Title 26 - Internal Revenue |
Chapter I - Internal Revenue Service, Department of the Treasury |
SubChapter A - Income Tax |
Part 1 - Income Taxes |
Effects on Shareholders and Security Holders |
§ 1.356-6T - Rules for treatment of nonqualified preferred stock as “other property” (temporary).
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(a)
In general. For purposes of §§ 1.354-1(e), 1.355-1(c), and 1.356-3(b), the termsstock andsecurities do not include—(1) Nonqualified preferred stock, as defined in section 351(g)(2), received in exchange for (or in a distribution with respect to) stock, or a right to acquire stock, other than nonqualified preferred stock; or
(2) A right to acquire such nonqualified preferred stock, received in exchange for (or in a distribution with respect to) stock, or a right to acquire stock, other than nonqualified preferred stock.
(b)
Exceptions. The following exceptions apply:(1)
Certain recapitalizations. Paragraph (a) of this section does not apply in the case of a recapitalization under section 368(a)(1)(E) of a family-owned corporation as described in section 354(a)(2)(C)(ii)(II).(2)
Transition rule. Paragraph (a) of this section does not apply to a transaction described in section 1014(f)(2) of the Taxpayer Relief Act of 1997 (111 Stat. 921).(c)
Effective date. This section applies to nonqualified preferred stock, or a right to acquire such stock, received in connection with a transaction occurring on or after March 9, 1998.