CALIFORNIA FAMILY LAW
...Income Tax Matters
......Community Property: Assets
.........Business Interests
............Corporate Redemption
6 Cards On This Topic:

Road map to proper corporate redemption of one spouse's stock in dissolution.

Transferring spouse not subject to capital gains tax on corporate redemption of stock for the benefit of nontransferring spouse so long as transfer required by divorce decree.

Monies received by W when corp. redeemed her c/p stock nontaxable to her pursuant to IRC §1041.

Constructive dividend to H did not result from corp.'s redemption of Wife's stock.

Redemption of W's stock in corp. held not to be for benefit of H and therefore taxable to W.

W will be taxed on moneys received upon redemption of her c/p stock by H's corporation; no constructive dividend to H.