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In General, If a Shareholder's Ownership Interest Is Not Diminished

question 98

True/False

In general, if a shareholder's ownership interest is not diminished as a result of a stock redemption, the Code will treat the transaction as a sale or exchange.


Definitions:

Quasi-Contract

An obligation imposed by the law to avoid injustice, even though no true contract exists between the parties.

Duty to Mitigate Damages

The legal principle requiring a party suffering loss as a result of a breach of contract to take reasonable action to minimize the financial harm.

Breach of Contract

A violation of any of the agreed-upon terms and conditions of a legal contract.

Punitive Damages

Monetary compensation awarded to an injured party that goes beyond what is necessary to compensate for losses and is intended to punish the wrongdoer.

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