Section 331 Form 2016-2024

Section 331 Form: What You Should Know

This section applies to a share of stock that is an interest in a corporation for the purpose of section 1.331-1(a)(2). In general, the rules are based on the type of corporation and the type of distribution (i.e., complete or partial) made. (i) Corporation Type. Section 331 is applicable when, based on a determination that the corporation is a type of corporation with respect to a distribution, Section 1441(b) of the Code applies. See the discussion below for further details. (a)(1) The type of corporation. A determination of whether a dividend is a dividend at the time a distribution is made is based on the type of corporation with respect to which the distribution is made. The type of corporation may be determined by examination of the articles, by consideration of the tax consequences of the type of corporation described in the articles (e.g., whether the tax consequences are similar to all similar types of corporations for which the Corporation Income Tax Act of 1986 is applicable) and, if applicable, by consideration of the tax consequences of a change in the type of corporation, including a modification of the form or characteristics of the corporation, if the corporation had been the type of corporation described in the articles at the time of the change. In determining whether a distribution is made to a holder of stock in a corporation that is the type of company described in the article for the purposes of determining whether the distribution amounts are subject to the tax consequences of the type of corporation described in the article, the consideration shall be limited to the consideration of the corporation's taxable income from continuing operations in the current year, its expected taxable income from continuing operations in the current year and the expected amount of the tax liability incurred in carrying on its business at the time of the distribution (in addition to considering what the amount of the distribution amounts will be on completion of recovery of the loss incurred on the disposition of the property transferred as part of the distribution). (2) The type of distribution. A determination of whether a distribution is in full payment in exchange for the underlying stock is based on the type of dividend to which the stock is a basis. A shareholder will be treated as receiving a distribution in full payment in exchange for the underlying stock if the shareholder would be treated as receiving a distribution of the same type to which the stock is a basis if the shareholder received: 1.

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