Company Stock Repurchase Program

[cfspartan]

What is the name of your state (only U.S. law)? Wyoming

If you are the sole owner of a C-Corporation, can your company initiate a share repurchase program? Example - company earns $100,000 for the year profit. Rather than distribute a dividend to its shareholders, can it repurchase shares for a stated amount from its shareholders? Wouldn't this be a favorable conversion of ordinary income to capital gain income? I know it's a bit out there, but a response would be appreciated.

 

[LdiJ]

What is the name of your state (only U.S. law)? Wyoming

If you are the sole owner of a C-Corporation, can your company initiate a share repurchase program? Example - company earns $100,000 for the year profit. Rather than distribute a dividend to its shareholders, can it repurchase shares for a stated amount from its shareholders? Wouldn't this be a favorable conversion of ordinary income to capital gain income? I know it's a bit out there, but a response would be appreciated.

That is one that I would want to research and I don't have time to do that kind of research for free. Get a consult with a local tax professional.

I am guessing however, that there is probably case law out that that prohibits that in a closely held C-corp.