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Stripped preferred stock

(Tax Law)

Stock that meets the following tests.

  1. There has been a separation in ownership between the stock and any dividend on the stock that has not become payable.
  2. The stock:
    1. Is limited and preferred as to dividends,
    2. Does not participate in corporate growth to any significant extent, and
    3. Has a fixed redemption price.

Source : Internal Revenue Service - United States Department of Treasury

Language : English

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