"Angela Simpson" <angiesimpson[at]acsol.net> wrote:

- quote -

I have never been faced with this situation and it is not a
simple or common question, so could take some research to
come up with a good answer. Since the wrong answer could
become very expensive under the wrong circumstances, you
should seek specific professional advice.

That said, my guess is that it won't be a problem. The
agreement not to acquire stock probably refers to additional
stock, or to reacquire this stock voluntarily. If there is
a default, taking back the stock and selling it again is a
reasonable way to go.

Stu

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

What happens when a corporation defaults on a note to a
prior major shareholder for their stock redemption. In this
case, the prior shareholder has treated the redemption as an
exchange and is reporting on the installment method. He has
also made the agreement with IRS not to acquire any of the
corporation's stock for ten years.

If the note is secured by the redeemed stock, and the note
is in default, what are the reprecusions of the taxpayer
reacquiring the stock?

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >