MEWDS (Multiple Evanescent White Dot Syndrome) is a rare, unilateral, self-limiting inflammatory disease that afflicts young women more than men in a 4:1 ratio. Despite the lack of treatment, the prognosis is excellent. Our patient is the typical age and gender.
To qualify for sale or exchange treatment, a stock redemption generally must result in a substantial reduction in a shareholderâs ownership interest in the corporation.In the absence of this reduction in ownership interest, the redemption proceeds are taxed as dividend income. The former shareholder has no interest, other than that of a creditor, in the corporation for at least 10 years after the redemption (including an interest as an officer, director, or employee).
Sale Versus Distribution. If a redemption is made by a C corporation, the selling shareholder generally prefers the âsale or exchangeâ tax treatment noted above. If the redemption is treated as a âdistributionâ in such case, none of the redemption price is allowed to be offset by the shareholderâs basis in his stock.n conclusion, whenever an S corporation is considering a purchase of its shares from a shareholder, it is important to be mindful of the redemption rules in the IRC to determine how the transaction should be treated for tax purposes by the selling shareholder and the resulting impact on the S corporation.