PART 58—STOCK REPURCHASE EXCISE TAX Authority: 26 U.S.C. 4501(f) and 7805. Section 58.6001-1 also issued under 26 U.S.C. 6001; Section 58.6011-1 also issued under 26 U.S.C. 6011(a); Section 58.6060-1 also issued under 26 U.S.C. 6060(a); Section 58.6061-1 also issued under 26 U.S.C. 6061(a); Section 58.6065-1 also issued under 26 U.S.C. 6065; Section 58.6071-1 also issued under 26 U.S.C. 6071(a); Section 58.6091-1 also issued under 26 U.S.C. 6091(a); Section 58.6107-1 also issued under 26 U.S.C. 6107; Section 58.6109-1 also issued under 26 U.S.C. 6109(a); Section 58.6151-1 also issued under 26 U.S.C. 6151; Section 58.6694-1 also issued under 26 U.S.C. 6694; Section 58.6695-1 also issued under 26 U.S.C. 6695; Section 58.6696-1 also issued under 26 U.S.C. 6696. Source: T.D. 10002, 89 FR 55049, July 3, 2024, unless otherwise noted. Subpart A—Excise Tax on Stock Repurchases Source: T.D. 10037, 90 FR 53159, Nov. 24, 2025, unless otherwise noted. § 58.4501-0 Table of contents. This section lists the major captions that appear in §§ 58.4501-1 through 58.4501-7. § 58.4501-1 Excise tax on stock repurchases. (a) Excise tax imposed. (b) Definitions. (1) Acquisitive reorganization. (2) Applicable percentage. (3) Cessation date. (4) Clawback. (5) Code. (6) Controlled corporation. (7) Covered corporation. (8) Covered holder. (9) Covered non-stock instrument. (10) De minimis exception. (11) Distributing corporation. (12) E reorganization. (13) Economically similar transaction. (14) Employee. (15) Employer-sponsored retirement plan. (16) Established securities market. (17) F reorganization. (18) Forfeiture. (19) Gross repurchase amount. (20) Initiation date. (21) IRS. (22) Netting rule. (23) Non-RIC '40 Act fund. (24) Non-stock instrument. (25) Recapitalizing corporation. (26) REIT. (27) Reorganization exception. (28) Repurchase. (29) RIC. (30) SEC. (31) Section 317(b) redemption. (32) Specified affiliate. (33) Split-off. (34) Stock. (35) Stock repurchase excise tax. (36) Stock repurchase excise tax base. (37) Stock repurchase excise tax regulations. (38) Taxable year. (39) Treasury stock. (c) No application for any purposes of chapter 1 of the Code. (d) Status as a domestic or foreign corporation. (e) F reorganizations. § 58.4501-2 General rules regarding excise tax on stock repurchases. (a) Scope. (b) Computation of excise tax liability. (1) Imposition of tax. (2) De minimis exception. (c) Stock repurchase excise tax base. (1) In general. (2) Taxable year determination. (3) Repurchases before January 1, 2023. (d) Duration of covered corporation status. (1) Initiation date. (2) Cessation date. (3) Inbound and outbound F reorganizations. (e) Repurchase. (1) Overview. (2) Scope of repurchase. (3) Certain section 317(b) redemptions that are not repurchases. (4) Economically similar transactions. (5) Transactions that are not repurchases. (f) Specified affiliates. (1) Acquisitions of stock of a covered corporation by a specified affiliate treated as a repurchase. (2) Determination of specified affiliate status. (g) Date of repurchase. (1) General rule. (2) Regular-way sale. (h) Fair market value of repurchased stock. (1) In general. (2) Stock traded on an established securities market. (3) Stock not traded on an established securities market. (4) Market price of stock denominated in non-U.S. currency. § 58.4501-3 Exceptions. (a) Scope. (b) Reduction of covered corporation's stock repurchase excise tax base. (1) In general. (2) Coordination of exceptions. (c) Reorganization exception. (d) Stock contributions to an employer-sponsored retirement plan. (1) Reductions in computing covered corporation's stock repurchase excise tax base. (2) Classes of stock contributed to an employer-sponsored retirement plan. (3) Same class of stock repurchased and contributed. (4) Different class of stock repurchased and contributed. (5) Timing of contributions. (6) Contributions before January 1, 2023. (e) Repurchases or acquisitions by a dealer in securities in the ordinary course of business. (1) In general. (2) Applicability. (f) Repurchases by a RIC or a REIT. (g) Repurchase treated as a dividend. (1) In general. (2) Rebuttable presumption of no dividend equivalence. (3) Sufficient evidence requirement. (4) Documentation of sufficient evidence. (h) Repurchases by a non-RIC '40 Act fund. § 58.4501-4 Application of netting rule. (a) Scope. (b) Issuances and provisions of stock that are a reduction in computing the stock repurchase excise tax base. (1) General rule. (2) Stock issued or provided outside period of covered corporation status. (3) Issuances or provisions before January 1, 2023. (c) Stock issued or provided in connection with the performance of services. (1) In general. (2) Sale of shares to cover exercise price and withholding. (d) Date of issuance. (1) In general. (2) Stock issued or provided in connection with the performance of services. (e) Fair market value of issued or provided stock. (1) In general. (2) Stock traded on an established securities market. (3) Stock not traded on an established securities market. (4) Market price of stock denominated in non-U.S. currency. (5) Stock issued or provided in connection with the performance of services. (f) Issuances that are disregarded for purposes of applying the netting rule. (1) Distributions by a covered corporation of its own stock. (2) Issuances to a specified affiliate. (3) Issuances in an E reorganization or an F reorganization. (4) Deemed issuances under section 304(a)(1). (5) Deemed issuance of a fractional share. (6) Issuance by a covered corporation that is a dealer in securities. (7) Issuance by the target corporation in a reverse triangular merger. (8) Issuance as part of a section 1036(a) exchange. (9) Issuance as part of a distribution under section 355. (10) Stock contributions to an employer-sponsored retirement plan. (11) Net exercises and share withholding. (12) Settlement other than in stock. (13) Instrument not in the legal form of stock. § 58.4501-5 Examples. (a) Scope. (b) In general. (1) Example 1: Redemption of preferred stock not subject to an exception. (2) Example 2: Debt-for-debt exchange. (3) Example 3: Valuation of repurchase. (4) Example 4: Acquisition partially funded by the target corporation. (5) Example 5: Pro rata stock split. (6) Example 6: Acquisition of a target corporation in an acquisitive reorganization. (7) Example 7: E reorganization. (8) Example 8: E reorganization with non-qualifying property. (9) Example 9: Cash paid in lieu of fractional shares. (10) Example 10: F reorganization. (11) Example 11: Section 355 split-off. (12) Example 12: Section 355 split-off as part of a D reorganization. (13) Example 13: Section 355 spin-off. (14) Example 14: Section 355 spin-off as part of a D reorganization. (15) Example 15: Repurchase pursuant to an accelerated share repurchase agreement. (16) Example 16: Distribution in complete liquidation of a covered corporation. (17) Example 17: Complete liquidation of a covered corporation to which sections 331 and 332(a) both apply. (18) Example 18: Acquisition by disregarded entity. (19) Example 19: Multiple repurchases and contributions of same class of stock. (20) Example 20: Multiple repurchases and contributions of different classes of stock. (21) Example 21: Treatment of contributions after the taxable year. (22) Example 22: Becoming a covered corporation. (23) Example 23: Actual pro rata redemption in partial liquidation. (24) Example 24: Constructive redemption in partial liquidation. (25) Example 25: Non-pro rata redemption in partial liquidation. (26) Example 26: Physical settlement of call option contract. (27) Example 27: Net cash settlement of call option contract. (28) Example 28: Physical settlement of put option contract. (29) Example 29: Net cash settlement of put option contract. (30) Example 30: Indirect ownership. (31) Example 31: Restricted stock provided to a service provider. (32) Example 32: Restricted stock provided to a service provider with section 83(b) election. (33) Example 33: Forfeiture of restricted stock provided to a service provider with section 83(b) election. (34) Example 34: Vested stock provided to a service provider with share withholding. (35) Example 35: Stock option net exercise. (36) Example 36: Net share settlement not in connection with performance of services. (37) Example 37: Broker-assisted net exercise. (38) Example 38: Stock provided by a specified affiliate to an employee. (39) Example 39: Stock provided by a specified affiliate to a non-employee. (40) Example 40: Corporation treated as a domestic corporation under section 7874(b). § 58.4501-6 Applicability dates. (a) In general. (b) Exceptions. (1) Applicability date for certain rules. (2) Early application. (c) Special rules for acquisitions or repurchases of stock of certain foreign corporations. § 58.4501-7 Special rules for acquisitions or repurchases of stock of certain foreign corporations. (a) Scope. (b) Definitions. (1) Application of definitions in § 58.4501-1(b). (2) Section 4501(d) definitions. (c) Computation of section 4501(d) excise tax liability for a section 4501(d) covered corporation. (1) Imposition of tax. (2) Section 4501(d) de minimis exception. (3) Section 4501(d) excise tax base. (4) Section 4501(d)(1) repurchases or section 4501(d)(2) repurchases before January 1, 2023. (d) Section 4501(d)(2) coordination rules. (1) Coordination rule for section 4501(d)(1) repurchases and section 4501(d)(2) repurchases. (2) Coordination rule for multiple section 4501(d) covered corporations. (e) Status as applicable foreign corporation or covered surrogate foreign corporation. (1) Initiation date. (2) Cessation date. (3) Rules regarding F reorganizations. (f) Status as an applicable specified affiliate or a specified affiliate of a covered surrogate foreign corporation. (1) Timing of determination. (2) Determination of indirect ownership. (g) Foreign partnerships that are applicable specified affiliates. (1) In general. (2) Direct or indirect partner. (3) Control of a foreign corporation. (4) Indirect interests held through applicable foreign corporations. (5) De minimis domestic entity (direct or indirect) partner. (h) CSFC repurchase. (1) Overview. (2) Scope of CSFC repurchases. (3) Certain section 317(b) redemptions that are not CSFC repurchases. (4) Section 4501(d) economically similar transactions. (5) Transactions that are not CSFC repurchases. (i) [Reserved] (j) Date of section 4501(d)(1) repurchase or section 4501(d)(2) repurchase. (1) General rule. (2) Regular-way sale. (k) Fair market value of stock of an applicable foreign corporation or a covered surrogate foreign corporation that is repurchased or acquired. (1) In general. (2) Stock traded on an established securities market. (3) Stock not traded on an established securities market. (4) Market price of stock denominated in non-U.S. currency. (l) Section 4501(d) exceptions. (1) In general. (2) Section 4501(d) reorganization exception. (3) Stock contributions to an employer-sponsored retirement plan. (4) Repurchases or acquisitions by a dealer in securities in the ordinary course of business. (5) Repurchases by a RIC or REIT. (6) CSFC repurchase treated as a dividend. (7) Repurchases by a non-RIC '40 Act fund. (m) Application of section 4501(d) netting rule. (1) In general. (2) Stock issued or provided outside period of applicable foreign corporation or covered surrogate foreign corporation status. (3) Issuances or provisions before January 1, 2023. (4) Stock Issued or provided in connection with the performance of services. (5) Date of issuance or provision for section 4501(d) netting rule. (6) Fair market value of stock of an applicable foreign corporation or a covered surrogate foreign corporation that is issued or provided to employees. (7) Issuances that are disregarded for purposes of applying the section 4501(d) netting rule. (n) Section 4501(d)(1) examples. (1) Example 1: Section 4501(d) netting rule with respect to a single applicable specified affiliate. (2) Example 2: Section 4501(d) netting rule with respect to multiple applicable specified affiliates. (3) Example 3: Foreign partnership that is an applicable specified affiliate. (4) Example 4: Foreign partnership that is not an applicable specified affiliate. (5) Example 5: Foreign partnership that is directly owned by foreign corporations and is an applicable specified affiliate. (o) Section 4501(d)(2) examples. (1) Example 1: Section 4501(d) netting rule with respect to an expatriated entity. (2) Example 2: Section 4501(d)(2) repurchase from the covered surrogate foreign corporation or another specified affiliate of the covered surrogate foreign corporation. (3) Example 3: Liability with respect to multiple expatriated entities. (p) Applicability dates. (1) In general. (2) Transition rule for foreign partnership de minimis rule. (3) Early application. § 58.4501-1 Excise tax on stock repurchases. (a) Excise tax imposed. see (b) Definitions. (1) Acquisitive reorganization. acquisitive reorganization (i) Section 368(a)(1)(A) of the Code, including by reason of section 368(a)(2)(D) or (a)(2)(E); (ii) Section 368(a)(1)(C); (iii) Section 368(a)(1)(D), if the reorganization satisfies the requirements of section 354(b)(1) of the Code; or (iv) Section 368(a)(1)(G), if the reorganization satisfies the requirements of section 354(b)(1). (2) Applicable percentage. applicable percentage (3) Cessation date. cessation date (4) Clawback. clawback (5) Code. Code (6) Controlled corporation. controlled corporation (7) Covered corporation. covered corporation (8) Covered holder. covered holder (9) Covered non-stock instrument. covered non-stock instrument (10) De minimis exception. de minimis exception (11) Distributing corporation. distributing corporation (12) E reorganization. E reorganization (13) Economically similar transaction. economically similar transaction (14) Employee. employee (15) Employer-sponsored retirement plan In general. employer-sponsored retirement plan (ii) ESOPs included. employer-sponsored retirement plan (16) Established securities market. established securities market (17) F reorganization. F reorganization (18) Forfeiture. forfeiture (19) Gross repurchase amount. gross repurchase amount (20) Initiation date. initiation date (21) IRS. IRS (22) Netting rule. netting rule (23) Non-RIC '40 Act fund. non-RIC '40 Act fund (24) Non-stock instrument. non-stock instrument (25) Recapitalizing corporation. recapitalizing corporation (26) REIT. REIT real estate investment trust (27) Reorganization exception. reorganization exception (28) Repurchase. repurchase (29) RIC. RIC regulated investment company (30) SEC. SEC (31) Section 317(b) redemption. section 317(b) redemption (32) Specified affiliate. specified affiliate (i) Any corporation more than 50 percent of the stock of which is owned (by vote or by value), directly or indirectly, by the corporation; and (ii) Any partnership more than 50 percent of the capital interests or profits interests of which is held, directly or indirectly, by the corporation. (33) Split-off. split-off (34) Stock In general. stock (ii) Additional tier 1 capital. stock (A) Qualifies as additional tier 1 capital (within the meaning of 12 CFR 3.20(c), 217.20(c), 217.608(a)(2), 324.20(c), or 628.20(c)); and (B) Does not qualify as common equity tier 1 capital (within the meaning of 12 CFR 3.20(b), 217.20(b), 217.608(a)(3), 324.20(b), or 628.20(b)). (iii) Section 1504(a)(4) stock. stock (35) Stock repurchase excise tax. stock repurchase excise tax (36) Stock repurchase excise tax base. stock repurchase excise tax base (37) Stock repurchase excise tax regulations. stock repurchase excise tax regulations (i) Subparts A and B of this part; and (ii) Section 1.1275-6(f)(12)(iii) of this chapter (providing that the integration of a qualifying debt instrument with a hedge pursuant to § 1.1275-6 of this chapter is not taken into account in determining whether and when stock is repurchased or issued). (38) Taxable year. taxable year (39) Treasury stock. treasury stock (c) No application for any purposes of chapter 1 of the Code. (d) Status as a domestic or foreign corporation. (e) F reorganizations. § 58.4501-2 General rules regarding excise tax on stock repurchases. (a) Scope. (b) Computation of excise tax liability Imposition of tax. (i) The applicable percentage; by (ii) The stock repurchase excise tax base of the covered corporation for the taxable year determined in accordance with paragraph (c)(1) of this section. (2) De minimis exception In general. de minimis exception (A) The stock of the covered corporation that is repurchased by the covered corporation (as determined under paragraph (e) of this section). (B) The stock of the covered corporation that is acquired by a specified affiliate of the covered corporation (as determined under paragraph (f) of this section). (ii) Determination. (A) Any exception under § 58.4501-3; and (B) Any adjustments pursuant to the netting rule under § 58.4501-4. (c) Stock repurchase excise tax base In general. stock repurchase excise tax base (i) Determining (in accordance with paragraphs (e) through (h) of this section) the aggregate fair market value of the stock of the covered corporation that is repurchased by the covered corporation or acquired by a specified affiliate of the covered corporation during the covered corporation's taxable year ( gross repurchase amount (ii) Reducing the gross repurchase amount by the fair market value of the stock of the covered corporation repurchased by the covered corporation or acquired by a specified affiliate of the covered corporation during the covered corporation's taxable year to the extent the repurchase or acquisition qualifies for an exception in accordance with § 58.4501-3; and then (iii) Further reducing the gross repurchase amount by the aggregate fair market value of stock of the covered corporation issued by the covered corporation or provided by a specified affiliate of the covered corporation during the covered corporation's taxable year under the netting rule in accordance with § 58.4501-4. (2) Taxable year determination In general. (ii) No carrybacks or carryforwards. (3) Repurchases before January 1, 2023. (i) Included in the stock repurchase excise tax base of the covered corporation; nor (ii) Taken into account in determining the applicability of the de minimis exception. (d) Duration of covered corporation status Initiation date. (2) Cessation date. (3) Inbound and outbound F reorganizations Inbound F reorganization. (ii) Outbound F reorganization. (e) Repurchase Overview. repurchase (2) Scope of repurchase. repurchase (i) A section 317(b) redemption, except as provided in paragraph (e)(3) of this section; or (ii) An economically similar transaction described in paragraph (e)(4) of this section. (3) Certain section 317(b) redemptions that are not repurchases. (i) Section 304(a)(1) transactions Rule regarding deemed distributions. (B) Rule regarding deemed issuances. see (ii) Leveraged buyouts and take-private transactions. (iii) Stock issued prior to August 16, 2022. (A) Mandatory redemption by the covered corporation; or (B) A unilateral put option by the holder of such stock. (iv) Payment by a covered corporation of cash in lieu of fractional shares. (A) The payment is carried out as part of a transaction that qualifies as a reorganization under section 368(a) of the Code or a distribution to which section 355 of the Code applies, or pursuant to the settlement of an option or a similar financial instrument (for example, a convertible debt instrument or convertible preferred share); (B) The cash received by the shareholder entitled to the fractional share is not separately bargained-for consideration (that is, the cash paid by the covered corporation in lieu of the fractional share represents a mere rounding off of the shares issued in the exchange or settlement); (C) The payment is carried out solely for administrative convenience (and, therefore, solely for non-tax reasons); and (D) The amount of cash paid to the shareholder in lieu of a fractional share does not exceed the fair market value of one full share of the class of stock of the covered corporation with respect to which the payment of cash in lieu of a fractional share is made. (4) Economically similar transactions. (i) E reorganizations In general. (B) Exception. ( 1 ( 2 (ii) Split-offs. (iii) Certain forfeitures and clawbacks of stock In general. (B) Stock subject to post-closing price adjustments. (C) Stock for which a section 83(b) election was made. (D) Clawbacks. (5) Transactions that are not repurchases. (i) Complete liquidations. (A) In complete liquidation of the covered corporation to which section 331 or 332(a) (or both) applies; (B) Pursuant to a resolution or plan of dissolution of the covered corporation that is reported on an original (but not a supplemented or an amended) IRS Form 966, Corporate Dissolution or Liquidation (C) Pursuant to a deemed dissolution of the covered corporation (for instance, pursuant to a deemed liquidation under § 301.7701-3 of this chapter). (ii) Distributions during taxable year of complete liquidation or dissolution. (A) Completely liquidates during the taxable year (that is, has a final distribution during the taxable year in a complete liquidation to which section 331 or 332(a) (or both) applies); (B) Dissolves during the taxable year pursuant to a resolution or plan of dissolution as reported on an original (but not a supplemented or an amended) IRS Form 966, Corporate Dissolution or Liquidation (C) Is deemed to dissolve during the taxable year (for instance, pursuant to a deemed liquidation under § 301.7701-3 of this chapter). (iii) Divisive transactions under section 355 other than split-offs In general. (B) Exception regarding non-qualifying property in spin-offs. (iv) Non-redemptive distributions subject to section 301(c)(2) or (3). (A) Is subject to section 301(c)(2) or (3); and (B) The distributee does not exchange stock of the covered corporation (and is not treated as exchanging stock of the covered corporation for Federal income tax purposes). (v) Acquisitive reorganizations. (vi) Net cash settlement of an option contract or other derivative financial instrument In general. (B) Exception regarding net cash settlement of an option contract or other derivative financial instrument treated as stock. (vii) Repurchases from a specified affiliate. (f) Specified affiliates Acquisitions of stock of a covered corporation by a specified affiliate treated as a repurchase. (2) Determination of specified affiliate status Timing of determination. (ii) Indirect ownership. (g) Date of repurchase General rule. (2) Regular-way sale. (h) Fair market value of repurchased stock In general. (2) Stock traded on an established securities market In general. (ii) Acceptable methods. (A) The daily volume-weighted average price as determined on the date the stock is repurchased by the covered corporation or acquired by a specified affiliate of the covered corporation. (B) The closing price on the date the stock is repurchased by the covered corporation or acquired by a specified affiliate of the covered corporation. (C) The average of the high and low prices on the date the stock is repurchased by the covered corporation or acquired by a specified affiliate of the covered corporation. (D) The trading price at the time the stock is repurchased by the covered corporation or acquired by a specified affiliate of the covered corporation. (iii) Date of repurchase not a trading day. (iv) Consistency requirement Solely one method permitted for determining market price of repurchased or acquired stock. (B) Application to netting rule. See (v) Stock traded on multiple exchanges In general. (B) Stock traded on multiple exchanges in country where covered corporation is organized. (C) Other cases in which stock is traded on multiple exchanges. (3) Stock not traded on an established securities market General rule. 1 (ii) Consistency requirement Solely one method permitted for determining market price of repurchased or acquired stock. 1 (B) Application to netting rule. (4) Market price of stock denominated in non-U.S. currency. § 58.4501-3 Exceptions. (a) Scope. see (b) Reduction of covered corporation's stock repurchase excise tax base In general. See (2) Coordination of exceptions. (c) Reorganization exception. (d) Stock contributions to an employer-sponsored retirement plan Reductions in computing covered corporation's stock repurchase excise tax base General rule. (ii) Special rule for leveraged ESOPs. (2) Classes of stock contributed to an employer-sponsored retirement plan. (3) Same class of stock repurchased and contributed. (i) The aggregate fair market value of the stock of the same class that was repurchased or acquired (as determined under § 58.4501-2(h)) during the covered corporation's taxable year; or (ii) The amount obtained by— (A) Determining the aggregate fair market value of all stock of that class repurchased or acquired (as determined under § 58.4501-2(h)) during the covered corporation's taxable year, reduced by the fair market value of shares of that class of stock that is a reduction to the stock repurchase excise tax base for the taxable year under an exception in this section other than the exception in this paragraph (d); (B) Dividing the amount determined under paragraph (d)(3)(ii)(A) of this section by the number of shares of that class repurchased or acquired, reduced by the number of shares of that class of stock the fair market value of which is a reduction to the stock repurchase excise tax base for the taxable year under an exception in this section other than the exception in this paragraph (d); and (C) Multiplying the amount determined under paragraph (d)(3)(ii)(B) of this section by the number of shares of that class contributed to an employer-sponsored retirement plan for the taxable year. (4) Different class of stock repurchased and contributed. (5) Timing of contributions In general. (ii) Treatment of contributions after close of taxable year. (A) The stock must be contributed to the employer-sponsored retirement plan by the filing deadline for the form on which the stock repurchase excise tax must be reported (applicable form) for that taxable year of the covered corporation. (B) The stock must be treated by the employer-sponsored retirement plan in the same manner that the plan would treat a contribution received on the last day of that taxable year of the covered corporation. (iii) No duplicate reductions. (6) Contributions before January 1, 2023. (e) Repurchases or acquisitions by a dealer in securities in the ordinary course of business In general. (2) Applicability. (i) The dealer accounts for the stock as securities held primarily for sale to customers in the dealer's ordinary course of business; (ii) The dealer disposes of the stock within a period of time that is consistent with the holding of the stock for sale to customers in the dealer's ordinary course of business, taking into account the terms of the stock and the conditions and practices prevailing in the markets for similar stock during the period in which the stock is held; and (iii) The dealer (if it is a covered corporation) does not sell or otherwise transfer the stock to a specified affiliate of the covered corporation, or the dealer (if it is a specified affiliate of the covered corporation) does not sell or otherwise transfer the stock to the covered corporation or to another specified affiliate of the covered corporation, in each case other than in a sale or transfer to a dealer that also satisfies the requirements of this paragraph (e)(2). (f) Repurchases by a RIC or REIT. (g) Repurchase treated as a dividend In general. (2) Rebuttable presumption of no dividend equivalence Presumption. (ii) Rebuttal of presumption. (3) Sufficient evidence requirement In general. (A) Establish, based on information known to the covered corporation (for example, through legal documentation of share ownership, publicly available information, the pro rata nature of the repurchase, or the shareholder certification safe harbor described in paragraph (g)(3)(ii) of this section), that— ( 1 ( 2 1 (B) Treat the repurchase consistent with the treatment described in paragraph (g)(3)(i)(A)( 1 (C) Demonstrate sufficient earnings and profits to treat as a dividend either the redemption under section 302 or the receipt of money or other property under section 356. (ii) Shareholder certification safe harbor In general. ( 1 ( 2 (B) Content of shareholder certification. ( 1 ( 2 ( 3 ( 4 ( 5 ( 6 ( 7 ( 8 see ( 9 ( 10 (C) Agreement to shareholder certification. 1 ( 1 1 ( 2 1 (4) Documentation of sufficient evidence Retention and availability of evidence. (ii) Retention of supporting records. (h) Repurchases by a non-RIC '40 Act fund. (1) The non-RIC '40 Act fund is an open-end company (2) The non-RIC '40 Act fund is a closed-end company § 58.4501-4 Application of netting rule. (a) Scope. netting rule see (b) Issuances and provisions of stock that are a reduction in computing the stock repurchase excise tax base General rule. (i) The stock is issued by the covered corporation in connection with the performance of services for the covered corporation by an employee or other service provider of the covered corporation. (ii) The stock is provided by a specified affiliate of the covered corporation in connection with the performance of services for the specified affiliate by an employee or other service provider of the specified affiliate. (iii) The stock is issued by the covered corporation other than in connection with the performance of services. (2) Stock issued or provided outside period of covered corporation status. See (3) Issuances or provisions before January 1, 2023. (c) Stock issued or provided in connection with the performance of services In general. (2) Sale of shares to cover exercise price and withholding Payment or advance by third party equal to exercise price. (ii) Advance by third party equal to withholding obligation. (d) Date of issuance In general. (2) Stock issued or provided in connection with the performance of services In general. (ii) Stock options and stock appreciation rights. (iii) Stock on which a section 83(b) election is made. (e) Fair market value of issued or provided stock In general. (2) Stock traded on an established securities market In general. (ii) Acceptable methods. (A) The daily volume-weighted average price as determined on the date the stock is issued by the covered corporation. (B) The closing price on the trading day the stock is issued by the covered corporation, or the immediately preceding trading day. (C) The average of the high and low prices on the date the stock is issued by the covered corporation. (D) The trading price at the time the stock is issued by the covered corporation. (iii) Date of issuance not a trading day. (iv) Consistency requirement Solely one method permitted for determining market price of issued stock. (B) Application to repurchased stock. See (v) Stock traded on multiple exchanges. See (3) Stock not traded on an established securities market General rule. 1 (ii) Consistency requirement. See (4) Market price of stock denominated in non-U.S. currency. (5) Stock issued or provided in connection with the performance of services. (f) Issuances that are disregarded for purposes of applying the netting rule. (1) Distributions by a covered corporation of its own stock. (2) Issuances to a specified affiliate In general. (A) To a specified affiliate of the covered corporation; or (B) In connection with the performance of services by an employee of, or other service provider for, a specified affiliate of the covered corporation (but see paragraph (f)(2)(iv) of this section, allowing certain compensatory transfers of a specified affiliate to be regarded in accordance with paragraph (b)(1)(ii) of this section). (ii) Subsequent transfer by specified affiliate. (A) The subsequent transfer by the specified affiliate occurs within the same taxable year that the specified affiliate receives the stock from the covered corporation ( applicable year (B) The covered corporation does not otherwise reduce its stock repurchase excise tax base for the applicable year with respect to the stock under this section; and (C) The subsequent transfer by the specified affiliate is not in connection with the performance of services provided to the specified affiliate (but see paragraph (f)(2)(iv) of this section, allowing certain compensatory transfers of a specified affiliate to be regarded in accordance with paragraph (b)(1)(ii) of this section). (iii) Specific identification of shares. (iv) Subsequent transfers in connection with the performance of services for a specified affiliate. (3) Issuances in an E reorganization or an F reorganization. (i) Any stock issued by a recapitalizing corporation as part of a transaction qualifying as an E reorganization, but only to the extent such stock was issued in exchange for other stock of the recapitalizing corporation. (ii) Any stock issued by a resulting corporation (as defined in § 1.368-2(m)(1) of this chapter) as part of a transaction qualifying as an F reorganization. (4) Deemed issuances under section 304(a)(1). (5) Deemed issuance of a fractional share. (6) Issuance by a covered corporation that is a dealer in securities. (7) Issuance by the target corporation in a reverse triangular merger. (8) Issuance as part of a section 1036(a) exchange. (9) Issuance as part of a distribution under section 355. (10) Stock contributions to an employer-sponsored retirement plan. (11) Net exercises and share withholding. (12) Settlement other than in stock. (13) Instrument not in the legal form of stock Issuance or provision of covered non-stock instrument generally disregarded. (ii) Definitions. (A) Non-stock instrument. non-stock instrument non-stock instrument (B) Covered non-stock instrument. covered non-stock instrument (C) Covered holder. covered holder ( 1 ( 2 (iii) Certain instruments treated as issued when repurchased or acquired In general. (B) Identification of an instrument not in the legal form of stock. (iv) Issuances pursuant to a public offering. (v) Coordination with specified affiliate rule. [T.D. 10037, 90 FR 53159, Nov. 24, 2025; 91 FR 6135, Feb. 11, 2026] § 58.4501-5 Examples. (a) Scope. See (b) In general. (1) Example 1: Redemption of preferred stock not subject to an exception Facts. (ii) Analysis. See (iii) Mandatorily redeemable preferred stock issued prior to August 16, 2022. Example 1 See (2) Example 2: Debt-for-debt exchange Facts. (ii) Analysis. See (3) Example 3: Valuation of repurchase Facts. (ii) Analysis. See See See (iii) Application of netting rule. Example 3 See See See (4) Example 4: Acquisition partially funded by the target corporation Facts. (ii) Analysis. See See See (5) Example 5: Pro rata stock split Facts. (ii) Analysis. See See (6) Example 6: Acquisition of a target corporation in an acquisitive reorganization Facts. (ii) Analysis. See (7) Example 7: E reorganization Facts. (ii) Analysis. See See (8) Example 8: E reorganization with non-qualifying property Facts. Example 7 (ii) Analysis regarding repurchase treatment, timing, and amount. See See id. See See (iii) Analysis regarding impact of issuance of New Common Stock on Corporation X's stock repurchase excise tax base. See (9) Example 9: Cash paid in lieu of fractional shares Facts. Example 7 (ii) Analysis. See (10) Example 10: F reorganization Facts. See (ii) Analysis regarding repurchase treatment, timing, and amount. See See See See See See (11) Example 11: Section 355 split-off Facts. (ii) Analysis regarding repurchase treatment, timing, and amount. See See See (iii) Analysis regarding impact of Corporation X Split-Off on Corporation X's stock repurchase excise tax base. See See (12) Example 12: Section 355 split-off as part of a D reorganization Facts. Example 11 (ii) Analysis regarding Corporation X's stock repurchase excise tax base. Example 11 (iii) Analysis regarding Controlled's stock repurchase excise tax base. See See (13) Example 13: Section 355 spin-off Facts. Example 11 (ii) Analysis. See (14) Example 14: Section 355 spin-off as part of a D reorganization Facts. Example 13 (ii) Analysis regarding Corporation X's stock repurchase excise tax base. See See (iii) Analysis regarding Controlled's stock repurchase excise tax base. Example 12 (15) Example 15: Repurchase pursuant to an accelerated share repurchase agreement Facts. (ii) Analysis. See See see also See (16) Example 16: Distribution in complete liquidation of a covered corporation Facts. (ii) Analysis. See (17) Example 17: Complete liquidation of a covered corporation to which sections 331 and 332(a) both apply Facts. Example 16 (ii) Analysis. Example 16 (18) Example 18: Acquisition by disregarded entity Facts. (ii) Analysis. See (19) Example 19: Multiple repurchases and contributions of same class of stock Facts. (ii) Analysis. See See See (20) Example 20: Multiple repurchases and contributions of different classes of stock Facts. Example 19 (ii) Analysis. See (21) Example 21: Treatment of contributions after the taxable year Facts. See (ii) Analysis. See (22) Example 22: Becoming a covered corporation Facts. (ii) Analysis regarding purchase on February 15, 2025. See (iii) Analysis regarding issuance on April 1, 2025. See See See (iv) Analysis regarding purchase on November 15, 2025. See See See (23) Example 23: Actual pro rata redemption in partial liquidation Facts. (ii) Analysis. See See (24) Example 24: Constructive redemption in partial liquidation Facts. Example 23 (ii) Analysis. Example 23 (25) Example 25: Non-pro rata redemption in partial liquidation Facts. Example 23 (ii) Analysis. Example 23 (26) Example 26: Physical settlement of call option contract Facts. (ii) Analysis. See See See (27) Example 27: Net cash settlement of call option contract Facts. Example 26 (ii) Analysis. See See (28) Example 28: Physical settlement of put option contract Facts. (ii) Analysis. See See See (29) Example 29: Net cash settlement of put option contract Facts. Example 28 (ii) Analysis. See (30) Example 30: Indirect ownership Facts. (ii) Analysis. See See (31) Example 31: Restricted stock provided to a service provider Facts. (ii) Analysis. See (32) Example 32: Restricted stock provided to a service provider with section 83(b) election Facts. Example 31 (ii) Analysis. See (33) Example 33: Forfeiture of restricted stock provided to a service provider with section 83(b) election Facts. Example 32 (ii) Analysis. Example 32 See See See See (34) Example 34: Vested stock provided to a service provider with share withholding Facts. (ii) Analysis. See See (35) Example 35: Stock option net exercise Facts. (ii) Analysis. See See (36) Example 36: Net share settlement not in connection with performance of services Facts. (ii) Analysis. See (37) Example 37: Broker-assisted net exercise Facts. Example 35 (ii) Analysis. See (38) Example 38: Stock provided by a specified affiliate to an employee Facts. (ii) Analysis. See (39) Example 39: Stock provided by a specified affiliate to a non-employee Facts. Example 38 (ii) Analysis. Example 38 (40) Example 40: Corporation treated as a domestic corporation under section 7874(b) Facts. (ii) Analysis. See [T.D. 10037, 90 FR 53159, Nov. 24, 2025; 90 FR 59380, Dec. 19, 2025; 91 FR 6135, Feb. 11, 2026] § 58.4501-6 Applicability dates. (a) In general. (1) Repurchases of stock of a covered corporation occurring after December 31, 2022; and (2) Issuances and provisions of stock of a covered corporation occurring during taxable years ending after December 31, 2022. (b) Exceptions Applicability date for certain rules. (i) Repurchases of stock of a covered corporation occurring after April 12, 2024; and (ii) Issuances and provisions of stock of a covered corporation occurring after April 12, 2024. (2) Early application. (i) Repurchases of stock of the covered corporation occurring on or before April 12, 2024, and after December 31, 2022; and (ii) Issuances and provisions of stock of the covered corporation occurring on or before April 12, 2024, and during taxable years ending after December 31, 2022. (c) Special rules for acquisitions or repurchases of stock of certain foreign corporations. See § 58.4501-7 Special rules for acquisitions or repurchases of stock of certain foreign corporations. (a) Scope. CSFC repurchase. (b) Definitions Application of definitions in § 58.4501-1(b). (i) For all definitions provided in § 58.4501-1(b) other than those described in paragraph (b)(1)(ii) of this section, any reference in those definitions to a covered corporation section 4501(d) covered corporation, applicable foreign corporation, covered surrogate foreign corporation, (ii) For the definitions of employee employer-sponsored retirement plan covered corporation specified affiliates section 4501(d) covered corporation. (2) Section 4501(d) definitions. (i) Applicable foreign corporation. applicable foreign corporation (ii) Applicable specified affiliate. applicable specified affiliate (iii) CSFC repurchase. CSFC repurchase (iv) Covered surrogate foreign corporation. covered surrogate foreign corporation September 20, 2021 March 4, 2003 (v) Direct partner. direct partner (vi) Domestic entity. domestic entity (vii) Expatriated entity. expatriated entity (viii) Indirect partner. indirect partner (ix) Section 4501(d) covered corporation. section 4501(d) covered corporation (A) An applicable specified affiliate of an applicable foreign corporation that is treated as a covered corporation under section 4501(d)(1)(A) by reason of a section 4501(d)(1) repurchase; or (B) Any expatriated entity with respect to a covered surrogate foreign corporation that is treated as a covered corporation under section 4501(d)(2)(A) by reason of a section 4501(d)(2) repurchase. (x) Section 4501(d) covered holder. section 4501(d) covered holder 3 (xi) Section 4501(d) covered non-stock instrument. section 4501(d) covered non-stock instrument 2 (xii) Section 4501(d) de minimis exception. section 4501(d) de minimis exception (xiii) Section 4501(d) economically similar transaction. section 4501(d) economically similar transaction (xiv) Section 4501(d) exception. section 4501(d) exception (xv) Section 4501(d) excise tax. section 4501(d) excise tax (xvi) Section 4501(d) excise tax base. section 4501(d) excise tax base (xvii) Section 4501(d) gross repurchase amount. section 4501(d) gross repurchase amount (xviii) Section 4501(d) netting rule. section 4501(d) netting rule (xix) Section 4501(d) non-stock instrument. section 4501(d) non-stock instrument 1 (xx) Section 4501(d) reorganization exception. section 4501(d) reorganization exception (xxi) Section 4501(d)(1) repurchase. section 4501(d)(1) repurchase section 4501(d)(1) repurchase (xxii) Section 4501(d)(2) repurchase. section 4501(d)(2) repurchase (c) Computation of section 4501(d) excise tax liability for a section 4501(d) covered corporation Imposition of tax. section 4501(d) excise tax (i) The applicable percentage; by (ii) The section 4501(d) excise tax base of the section 4501(d) covered corporation for the taxable year determined in accordance with paragraph (c)(3)(i) of this section. (2) Section 4501(d) de minimis exception In general. section 4501(d) de minimis exception (ii) Determination. (A) Any section 4501(d) exception under paragraph (l) of this section; and (B) Any adjustments pursuant to the section 4501(d) netting rule under paragraph (m) of this section. (3) Section 4501(d) excise tax base In general. section 4501(d) excise tax base (A) Determining the aggregate fair market value of, as applicable, all section 4501(d)(1) repurchases or section 4501(d)(2) repurchases during the section 4501(d) covered corporation's taxable year ( section 4501(d) gross repurchase amount (B) Reducing the section 4501(d) gross repurchase amount by the fair market value of stock repurchased or acquired in all section 4501(d)(1) repurchases or section 4501(d)(2) repurchases, as applicable, during the section 4501(d) covered corporation's taxable year to the extent any section 4501(d) exceptions apply in accordance with paragraph (l) of this section; and then (C) Further reducing the section 4501(d) gross repurchase amount by the aggregate fair market value of, as applicable, stock of the applicable foreign corporation or stock of the covered surrogate foreign corporation to the extent the section 4501(d) netting rule applies in accordance with paragraph (m) of this section. (ii) Taxable year determination In general. (B) No carrybacks or carryforwards. (4) Section 4501(d)(1) repurchases or section 4501(d)(2) repurchases before January 1, 2023. (d) Section 4501(d)(2) coordination rules Coordination rule for section 4501(d)(1) repurchases and section 4501(d)(2) repurchases. (2) Coordination rule for multiple section 4501(d) covered corporations In general. (ii) Full payment and reporting by a section 4501(d) covered corporation. (e) Status as applicable foreign corporation or covered surrogate foreign corporation Initiation date. (2) Cessation date. (3) Rules regarding F reorganizations Inbound F reorganization. (ii) Outbound F reorganization. (iii) Treatment of F reorganizations. (f) Status as an applicable specified affiliate or a specified affiliate of a covered surrogate foreign corporation Timing of determination. (2) Determination of indirect ownership. (g) Foreign partnerships that are applicable specified affiliates In general. (i) More than 50 percent of the capital interests or profits interests of the foreign partnership are held, directly or indirectly, by the applicable foreign corporation; and (ii) Under the rules described in paragraphs (g)(2) through (5) of this section, at least one domestic entity is a direct or indirect partner with respect to the foreign partnership. (2) Direct or indirect partner. (i) A domestic entity is a direct partner with respect to a foreign partnership if it directly owns an interest in the foreign partnership; and (ii) A domestic entity is an indirect partner with respect to a foreign partnership if the domestic entity owns an interest in the foreign partnership indirectly through— (A) One or more other foreign partnerships; (B) One or more foreign corporations controlled by one or more domestic entities within the meaning of paragraph (g)(3) of this section; or (C) An ownership chain with one or more entities described in paragraphs (g)(2)(ii)(A) and (B) of this section. (3) Control of a foreign corporation. (4) Indirect interests held through applicable foreign corporations. (5) De minimis domestic entity (direct or indirect) partner. (h) CSFC repurchase Overview. (2) Scope of CSFC repurchases. CSFC repurchase (i) A section 317(b) redemption with respect to stock of a covered surrogate foreign corporation, except as provided in paragraph (h)(3) of this section; or (ii) A section 4501(d) economically similar transaction described in paragraph (h)(4) of this section. (3) Certain section 317(b) redemptions that are not CSFC repurchases. (i) Section 304(a)(1) transactions. (ii) Leveraged buyouts and take-private transactions. (iii) Stock issued prior to August 16, 2022. (A) Mandatory redemption by the covered surrogate foreign corporation; or (B) A unilateral put option by the holder of such stock. (iv) Payment by a covered surrogate foreign corporation of cash in lieu of fractional shares. (A) The payment is carried out as part of a transaction that qualifies as a reorganization under section 368(a) of the Code or a distribution to which section 355 of the Code applies, or pursuant to the settlement of an option or a similar financial instrument (for example, a convertible debt instrument or convertible preferred share); (B) The cash received by the shareholder entitled to the fractional share is not separately bargained-for consideration (that is, the cash paid by the covered surrogate foreign corporation in lieu of the fractional share represents a mere rounding off of the shares issued in the exchange or settlement); (C) The payment is carried out solely for administrative convenience (and, therefore, solely for non-tax reasons); and (D) The amount of cash paid to the shareholder in lieu of a fractional share does not exceed the fair market value of one full share of the class of stock of the applicable foreign corporation or covered surrogate foreign corporation, as applicable, with respect to which the payment of cash in lieu of a fractional share is made. (4) Section 4501(d) economically similar transactions. section 4501(d) economically similar transaction (i) E reorganizations In general. (B) Exception. ( 1 ( 2 (ii) Split-offs. (iii) Certain forfeitures and clawbacks of stock In general. (B) Stock for which a section 83(b) election was made. (C) Clawbacks. (5) Transactions that are not CSFC repurchases. (i) Complete liquidations. (A) In complete liquidation of the covered surrogate foreign corporation to which section 331 or 332(a) (or both) applies; (B) Pursuant to a resolution or plan of dissolution of the covered surrogate foreign corporation that is reported on an original (but not a supplemented or an amended) IRS Form 966, Corporate Dissolution or Liquidation (C) Pursuant to a deemed dissolution of the covered surrogate foreign corporation (for instance, pursuant to a deemed liquidation under § 301.7701-3 of this chapter). (ii) Distributions during taxable year of complete liquidation or dissolution. (A) Completely liquidates during the taxable year (that is, has a final distribution during the taxable year in a complete liquidation to which section 331 or 332(a) (or both) applies); (B) Dissolves during the taxable year pursuant to a resolution or plan of dissolution as reported on an original (but not a supplemented or an amended) IRS Form 966, Corporate Dissolution or Liquidation (C) Is deemed to dissolve during the taxable year (for instance, pursuant to a deemed liquidation under § 301.7701-3 of this chapter). (iii) Divisive transactions under section 355 other than split-offs In general. (B) Exception regarding non-qualifying property in spin-offs. (iv) Non-redemptive distributions subject to section 301(c)(2) or (3). (A) Is subject to section 301(c)(2) or (3); and (B) The distributee does not exchange stock of the covered surrogate foreign corporation (and is not treated as exchanging stock of the covered surrogate foreign corporation for Federal income tax purposes). (v) Acquisitive reorganizations. (vi) Net cash settlement of an option contract In general. (B) Exception regarding net cash settlement of an option contract or other derivative financial instrument treated as stock. (i) [Reserved] (j) Date of section 4501(d)(1) repurchase or section 4501(d)(2) repurchase General rule. (2) Regular-way sale. (k) Fair market value of stock of an applicable foreign corporation or a covered surrogate foreign corporation that is repurchased or acquired In general. (2) Stock traded on an established securities market In general. (ii) Acceptable methods. (A) The daily volume-weighted average price as determined on the date the stock is acquired in a section 4501(d)(1) repurchase or section 4501(d)(2) repurchase. (B) The closing price on the date the stock is acquired in a section 4501(d)(1) repurchase or a section 4501(d)(2) repurchase. (C) The average of the high and low prices on the date the stock is acquired in a section 4501(d)(1) repurchase or a section 4501(d)(2) repurchase. (D) The trading price at the time the stock is acquired in a section 4501(d)(1) repurchase or a section 4501(d)(2) repurchase. (iii) Date of section 4501(d)(1) repurchase or section 4501(d)(2) repurchase not a trading day. (iv) Consistency requirement. (v) Stock traded on multiple exchanges In general. (B) Stock traded on multiple exchanges in country where corporation is organized. (C) Other cases in which stock is traded on multiple exchanges. (3) Stock not traded on an established securities market General rule. 1 (ii) Consistency requirement. 1 (4) Market price of stock denominated in non-U.S. currency. (l) Section 4501(d) exceptions In general Overview. section 4501(d) exception (ii) Reduction of section 4501(d) excise tax base. See (iii) Coordination of exceptions. (2) Section 4501(d) reorganization exception. section 4501(d) reorganization exception (3) Stock contributions to an employer-sponsored retirement plan Reductions to section 4501(d) excise tax base General rule. (B) Special rule for leveraged ESOPs. (ii) Classes of stock contributed to an employer-sponsored retirement plan. (iii) Determining amount of reduction to section 4501(d) excise tax base. (A) Same class of stock repurchased and contributed. ( 1 ( 2 ( i ( ii 2 i ( iii 2 ii (B) Different class of stock repurchased and contributed 1 In general. 2 ( 2 Maximum reduction permitted. 1 (iv) Timing of contributions In general. (B) Treatment of contributions after close of taxable year. ( 1 ( 2 (C) No duplicate reductions. (v) Contributions before January 1, 2023. (4) Repurchases or acquisitions by a dealer in securities in the ordinary course of business In general. (ii) Applicability. (A) The dealer accounts for the stock as securities held primarily for sale to customers in the dealer's ordinary course of business; (B) The dealer disposes of the stock within a period of time that is consistent with the holding of the stock for sale to customers in the dealer's ordinary course of business, taking into account the terms of the stock and the conditions and practices prevailing in the markets for similar stock during the period in which the stock is held; and (C) The dealer (if it is a covered surrogate foreign corporation) does not sell or otherwise transfer the stock to a specified affiliate of the covered surrogate foreign corporation or the dealer (if it is a specified affiliate of an applicable foreign corporation or of a covered surrogate foreign corporation, as applicable) does not sell or otherwise transfer the stock to the applicable foreign corporation, covered surrogate foreign corporation, or to another specified affiliate of the applicable foreign corporation or covered surrogate foreign corporation, as applicable, in each case other than in a sale or transfer to a dealer that also satisfies the requirements of this paragraph (l)(4)(ii). (5) Repurchases by a RIC or REIT. (6) CSFC repurchase treated as a dividend In general. (ii) Rebuttable presumption of no dividend equivalence Presumption. (B) Rebuttal of presumption. (iii) Sufficient evidence requirement In general. ( 1 ( i ( ii 1 i ( 2 1 i ( 3 (B) Shareholder certification safe harbor. ( 1 ( 2 (iv) Documentation of sufficient evidence Retention and availability of evidence. (B) Retention of supporting records. (7) Repurchases by a non-RIC '40 Act fund. (m) Application of section 4501(d) netting rule In general. section 4501(d) netting rule, See (2) Stock issued or provided outside period of applicable foreign corporation or covered surrogate foreign corporation status. See (3) Issuances or provisions before January 1, 2023. (4) Stock issued or provided in connection with the performance of services In general. (ii) Sale of shares to cover exercise price or withholding Payment or advance by third party equal to exercise price. (B) Advance by third party equal to withholding obligation. (5) Date of issuance or provision for section 4501(d) netting rule In general. (ii) Stock options and stock appreciation rights. (iii) Stock on which a section 83(b) election is made. (6) Fair market value of stock of an applicable foreign corporation or a covered surrogate foreign corporation that is issued or provided to employees In general. (ii) Market price of stock denominated in non-U.S. currency. (7) Issuances that are disregarded for purposes of applying the section 4501(d) netting rule In general. (ii) Stock contributions to an employer-sponsored retirement plan. (iii) Net exercises and share withholding. (iv) Settlement other than in stock. (v) Instrument not in the legal form of stock Issuance or provision of section 4501(d) covered non-stock instrument generally disregarded. 2 (B) Definitions. ( 1 Section 4501(d) non-stock instrument. section 4501(d) non-stock instrument section 4501(d) non-stock instrument ( 2 Section 4501(d) covered non-stock instrument. section 4501(d) covered non-stock instrument ( 3 Section 4501(d) covered holder. section 4501(d) covered holder (C) Certain instruments treated as issued when repurchased 1 In general. 2 ( 2 Identification of an instrument not in the legal form of stock. 1 (D) Issuances pursuant to a public offering. (n) Section 4501(d)(1) examples. (1) Example 1: Section 4501(d) netting rule with respect to a single applicable specified affiliate Facts. (ii) Analysis. See See See See See See See (2) Example 2: Section 4501(d) netting rule with respect to multiple applicable specified affiliates Facts. (ii) Analysis. See See See See See (3) Example 3: Foreign partnership that is an applicable specified affiliate Facts. (ii) Analysis. See See See See See See See (4) Example 4: Foreign partnership that is not an applicable specified affiliate Facts. Example 3 (ii) Analysis. See See See (5) Example 5: Foreign partnership that is directly owned by foreign corporations and is an applicable specified affiliate Facts. (ii) Analysis. See See See See (o) Section 4501(d)(2) examples. (1) Example 1: Section 4501(d) netting rule with respect to an expatriated entity Facts. (ii) Analysis. See See See See See (2) Example 2: Section 4501(d)(2) repurchase from the covered surrogate foreign corporation or another specified affiliate of the covered surrogate foreign corporation Facts. (ii) Analysis. See See See See (3) Example 3: Liability with respect to multiple expatriated entities Facts. (ii) Analysis. See See See See See See See See See (p) Applicability dates In general. (2) Transition rule for foreign partnership de minimis rule. (3) Early application. Subpart B—Procedure and Administration § 58.6001-1 Notice or regulations requiring records, statements, and special returns. (a) In general. (b) Notice by IRS requiring returns, statements, or the keeping of records. (c) Retention of records. (d) Applicability date. § 58.6011-1 General requirement of return, statement, or list. (a) In general. (b) Stock Repurchase Excise Tax Return. stock repurchase excise tax return Quarterly Federal Excise Tax Return, Excise Tax on Repurchase of Corporate Stock, (c) [Reserved] (d) Applicability date. [T.D. 10002, 89 FR 55049, July 3, 2024, as amended by T.D. 10037, 90 FR 53190, Nov. 24, 2025] § 58.6060-1 Reporting requirements for tax return preparers. (a) In general. (b) Applicability date. § 58.6061-1 Signing of returns and other documents. (a) In general. (b) Applicability date. § 58.6065-1 Verification of returns. (a) In general. (b) Applicability date. § 58.6071-1 Time for filing returns. (a) In general. Quarterly Federal Excise Tax Return, (b) Example. (c) Taxable years ending on or before June 28, 2024. Excise Tax on Repurchase of Corporate Stock (d) Example. (e) Applicability date. § 58.6091-1 Place for filing tax returns under chapter 37 of the Internal Revenue Code. (a) In general. (b) Hand-carried returns. (c) Exceptional cases. (d) Applicability date. § 58.6107-1 Tax return preparer must furnish copy of return or claim for refund to taxpayer and must retain a copy or record. (a) In general. (b) Applicability date. § 58.6109-1 Tax return preparers furnishing identifying numbers for returns or claims for refund. (a) In general. (b) Applicability date. § 58.6151-1 Time and place for paying of tax shown on returns. (a) In general. see (b) Applicability date. § 58.6694-1 Section 6694 penalties. (a) Penalties applicable to tax return preparer. see (b) Penalties for understatement due to an unreasonable position. (c) Penalties for understatement due to willful, reckless, or intentional conduct. (d) Extension of period of collection when tax return preparer pays 15 percent of a penalty for understatement of taxpayer's liability and certain other procedural matters. (e) Applicability date. § 58.6695-1 Other assessable penalties with respect to the preparation of tax returns or claims for refund for other persons. (a) In general. (b) Applicability date. § 58.6696-1 Claims for credit or refund by tax return preparers. (a) In general. (b) Applicability date.