A stock redemption is always treated as a sale or exchange for tax purposes.

Name: A stock redemption is always treated as a sale or exchange for tax purposes.
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A stock redemption can be treated as a sale or exchange for tax purposes, but it can also be treated as a dividend distribution, depending on the circumstances such as the shareholder's ownership percentage before and after the redemption, and whether certain IRS tests are met.

A Stock Redemption Is Always Treated as a Sale or Exchange