In applying the stock attribution rules to a stock redemption, stock owned by a shareholder who owns 65% of a corporation is deemed to be owned in full by the corporation.

Question

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According to the stock attribution rules, if a shareholder owns 65% or more of a corporation and that corporation redeems some of its stock, then the stock owned by the shareholder is deemed to be owned in full by the corporation. This is known as the 5/5 Rule.

In Applying the Stock Attribution Rules to a Stock Redemption