disqualified preferred stock
Defined in 1 place of the United States Code.
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.
Source
- 2013–201826 U.S.C. § 1059Internal Revenue Code · Corporate shareholders basis in stock reduced by nontaxed portion of extraordinary dividends · for purposes of this section
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—
Source
- 1994–present26 U.S.C. § 1059Internal Revenue Code · Corporate shareholders basis in stock reduced by nontaxed portion of extraordinary dividends · for purposes of this section