What is redemption distribution not equivalent to a dividend

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A redemption is treated as payment in exchange for the shareholder's stock when it is not essentially equivalent to a dividend. When is a redemption distribution not equivalent to a dividend? Include in your discussion comments concerning all tests used to determine dividend equivalency, as well as comments on how the following factors affect the dividend equivalency determination: valid business purpose, pro rata distributions, and relationship among the shareholders.

Reference no: EM131447739

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