A sale of preferred stock that is § 306 stock typically results in ordinary income to the shareholder.

Name: A sale of preferred stock that is § 306 stock typically results in ordinary income to the shareholder.
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The sale of § 306 stock typically results in ordinary income equal to the fair market value of the stock on the date of the stock dividend.The ordinary income that results is treated as a dividend for purposes of the 15% (or 0%)maximum tax on dividend income.

A Sale of Preferred Stock That Is § 306 Stock