disqualified preferred stock

Defined in 1 dictionary — U.S. Code

United States Code

26 U.S.C. § 1059 — for purposes of this section (9 versions over time)

For purposes of this subsection, the term "disqualified preferred stock" means any stock which is preferred as to dividends if—

(A) when issued, such stock has a dividend rate which declines (or can reasonably be expected to decline) in the future,

(B) the issue price of such stock exceeds its liquidation rights or its stated redemption price, or

(C) such stock is otherwise structured—

(i) to avoid the other provisions of this section, and

(ii) to enable corporate shareholders to reduce tax through a combination of dividend received deductions and loss on the disposition of the stock.

The Secretary shall prescribe such regulations as may be appropriate to carry out the purposes of this section, including regulations—