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 Rev. Rul. 77-93

1977-1 C.B. 80

Section 302

IRS Headnote

Redemption; agreement to notify of reacquisitions filed by executor. The executor of an estate may file the agreement described in section 302(c)(2)(A)(iii) of the Code on behalf of the decedent to qualify a redemption of the decedent's stock that occurred before the decedent's death as a complete termination of interest.

Full Text

Rev. Rul. 77-93

Advice has been requested whether, under the circumstances described below, the agreement described in section 302(c)(2)(A)(iii) of the Internal Revenue Code of 1954 may be filed by an executor on behalf of a decedent shareholder.

Corporation X has outstanding a single class of stock one-half of which was owned by a father and the other half by his son. Under the constructive ownership of stock rules of section 318(a)(1)(A)(ii) of the Code, each is considered to won the X stock owned by the other. In March 1976, X redeemed for cash all of its stock held by the father. After the redemption the father had no interest in X with the meaning of section 302(c)(2)(A)(i). However, because the father was still considered to own the X stock owned by his son, such ownership had to be waived, in accordance with section 302(c)(2)(A), to qualify the redemption as a complete termination of interest under section 302(b)(3). The father died in June 1976. In filing the 1976 Federal income tax return of the father within the prescribed period of time, the executor of the father's estate filed the agreement described in section 302(c)(2)(A)(iii) for the purpose of qualifying the father's redemption under section 302(b)(3). As specified in section 1.302-4(a) of the Income Tax Regulations, the agreement stated that the father had not acquired any interest in X within the meaning of section 302(c)(2)(A)(i) since the distribution in redemption.

Section 6012(b) of the Code provides that in the case of decedents, the income tax return of such individual required under section 6012(a) shall be made by the executor, administrator, or other person charged with the property of such decedent.

Section 6903 of the Code states that a fiduciary acting for another person shall assume the powers, rights, duties, and privileges of such other person in respect of a tax imposed on such other person. Pursuant to section 301.6903-1(d) of the regulations and section 7701(a)(6), the term "fiduciary" includes executors of estates.

Accordingly, the executor may file the agreement described in section 302(c)(2)(A)(iii) of the Code.