Six years ago, both Ronald and his mom owned 50% of the stock of Bronze Corporation. At such time, Bronze redeemed all of Ronald's stock. For the redemption year, Ronald filed the agreement required of the family attribution waiver and reported the transaction as a complete termination redemption (i.e., sale or exchange). In the current year, the mom passed away and willed her entire stock interest in Bronze to Ronald. The inheritance of Bronze stock by Ronald is a prohibited interest for purposes of the family attribution waiver.

Question

Quizplus · Accepted Answer

The inheritance of stock by Ronald does not constitute a prohibited interest in the context of the family attribution waiver rules, as the waiver was already effectively utilized for the prior transaction, and the inheritance itself does not violate the terms of the complete termination redemption previously reported.

Six Years Ago, Both Ronald and His Mom Owned 50