Reginald and Roland (Reginald's son)each own 50% of the stock of Robin Corporation.Reginald's stock interest is entirely redeemed by Robin Corporation.Two years later,Reginald loans Robin Corporation $250,000.As a result of the loan,the redemption of Reginald's stock cannot qualify for sale or exchange treatment.

Question

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Creditor interests,such as Reginald's loan to Robin,are not prohibited interests for purposes of the family attribution waiver.Assuming that Reginald satisfies the other requirements of the family attribution waiver (e.g.,required agreement filed),the redemption can qualify for sale or exchange treatment under the complete termination redemption provision.

Reginald and Roland (Reginald's Son)each Own 50% of the Stock