A pro rata distribution of nonconvertible preferred stock to common shareholders is not generally taxable.

Question

Quizplus · Accepted Answer

A pro rata distribution of nonconvertible preferred stock to common shareholders is generally not considered a taxable event. However, there may be some exceptions to this rule depending on the specific circumstances of the distribution. It is recommended to consult with a tax professional for guidance on individual cases.

A Pro Rata Distribution of Nonconvertible Preferred Stock to Common