RR-2019-13: Guidance on the application of subchapters C and S of chapter 1 of subtitle A of the Internal Revenue Code

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May 9, 2019

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Issue Number: RR-2019-13

Inside This Issue

Revenue Ruling 2019-13 provides guidance on the application of subchapters C and S of chapter 1 of subtitle A of the Internal Revenue Code (Code) to cash distributions made in redemption of the stock of C corporations formerly classified as S corporations and during the post-termination transition period as defined under section 1377(b) of the Code. Specifically, the revenue ruling holds that to the extent a corporation makes such a cash distribution that is subject to section 301 of the Code by reason of section 302(d) of the Code, the cash distribution should reduce the corporation’s accumulated adjustments account (within the meaning of section 1368(e) of the Code) to the extent of the proceeds of the redemption pursuant to section 1368 of the Code.

Revenue Ruling 2019-13 will be in IRB 2019-20, dated May 13, 2019.

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