Stock Surrender Agreement

On the basis of the facts and circumstances, the Finanzgericht concluded that the question had been answered in the affirmative. Second, the IRS argued that the taxable persons could not have received „essentially non-eshakable“ shares for the purposes of Section 83, but that they had at the same time „owned“ at least eight percent (80%) of the total combined voting rights of all classes of UMLIC S-Corp shares. as it was necessary to qualify for the non-recognition treatment provided for in Section 351. The Finanzgericht, for its part, was not persuaded by that argument and expressly stated that the applicable rules merely consider that shares issued in the context of an essentially non-existent service are not treated as shares of the outstanding company within the meaning of Sub-Chapter S.

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