Chaz Posted July 9, 2007 Posted July 9, 2007 Can anyone explain why the IRS has a definition in the final regs of "change in the ownership of a corporation" (which would be a distributable event if reach more than 50% new ownership, etc.) and "change in the effective control of a corporation" (which would be a distributable event if reach more than 30% new ownership, etc.)? I realize that the language in the two definitions is different, but is there any event that will meet the definition of the former that will not be triggered by the latter?
J Simmons Posted July 9, 2007 Posted July 9, 2007 Scenario 1: 45% shareholder gains 10% more of the stock, pushing her over the 50% threshold. Change in ownership. Scenario 2: New shareholder (i.e., previously 0% stockholdings) gains 32% of the stock in a 12 month period. Change in effective control. John Simmons johnsimmonslaw@gmail.com Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.
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