1.) Explain the process of stock redemption. 2.) Why do non-corporate shareholders prefer stock redemptions to qualify...

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Accounting

1.) Explain the process of stock redemption.
2.) Why do non-corporate shareholders prefer stockredemptions to qualify for sale treatment? (taximplications)
3.) Describe the difference between liquidating andnon-liquidating distributions from a partnership.
4.) The primary purpose of taxation is to create revenuefor the federal government. What are three secondarypurposes?
5.) What is the purpose of Domestic ProductionActivities Deduction (DPAD)?

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3.8 Ratings (412 Votes)

1SOMETIMES SHARES OF STOCK OFFERED BY A COMPANY ARE NOT REGULARMARKET DRIVEN COMMON SHAREINSTEAD THEY MAY BE PREFERENCE SHARESWHICH WILL CONSIDERED FIXED INCOME SECURITIES AND ARE ISSUED WITH A PAR VALUE WHEN THE PAR VALUE IS PAID BACKTO THE PURCHASER OF THE PREFERENCE SHARE THIS IS CONSIDERED A REDEMPTIONAN THE PROCESS OF REDEMPTION IS AS FOLLOW NOTEREDEEMABLE PREFRENCE SHARE CAN BE REEDEMED ONLYEQITY SHARE CAN NOT BE REEDEMED AT ANY COST 1 IT MUST BE AUTHORIZED BY ARTICLES OF ASSOCIATION OF COMPANY 2THE SHARES WIIL BE REEDEEMED ONLY IF THEY ARE FULLY PAID UP See Answer

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1.) Explain the process of stock redemption.2.) Why do non-corporate shareholders prefer stockredemptions to qualify for sale treatment? (taximplications)3.) Describe the difference between liquidating andnon-liquidating distributions from a partnership.4.) The primary purpose of taxation is to create revenuefor the federal government. What are three secondarypurposes?5.) What is the purpose of Domestic ProductionActivities Deduction (DPAD)?