Tammy owns 100 shares in Star Struck Corporation.The other 100 shares are owned by her husband Tommy.Which of the following statements is true?

Question

Quizplus · Accepted Answer

According to the family attribution rules, Tammy will be deemed to own her husband's shares as well. However, if she waives these rules and files a "triple i" agreement with the IRS, the stock redemption will be treated as an exchange for tax purposes. Therefore, option C is the correct answer. Option A is incorrect because it implies that the treatment of the redemption as an exchange is not affected by the family attribution rules. Option B is incorrect because it suggests that if Tammy waives the attribution rules, the redemption will be treated as a dividend, which is not accurate. Option D is incorrect because answer C is true.

Tammy Owns 100 Shares in Star Struck Corporation