Disproportionate Distribution
Disproportionate Distribution means:
a distribution in which some shareholders receive cash or other property and others receive increased proportionate interests in the assets or the earnings and profits of the corporation. A disproportionate distribution of stock or stock rights is taxable income for the recipient shareholder to the extent that the corporation has sufficient earnings and profits. Former IRC (check if this IRC provision is current here) § 305(b)(2).
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