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. The loan to Robin Corporation does not constitute a prohibited interest for purposes of the family attribution waiver.

Question

Quizplus · Accepted Answer

Since Reginald's stock interest was entirely redeemed, he no longer has an ownership interest in Robin Corporation. Therefore, his loan to the corporation does not constitute a prohibited interest and is allowed under the family attribution waiver.

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