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the sole shareholder of the corporation both before and after the
redemption” could not meet the section 302(b)(1) test. Since
section 318(a) deems Mr. Combrink the sole stockholder of LINKS,
the issuing corporation, both prior to and following the
transfer, he likewise is entitled to no relief under paragraph
(1).
Second, the attribution rules similarly prevent the subject
transaction for qualifying for sale treatment under section
302(b)(2). As a result of constructive ownership, the transfer
failed to effect the requisite change in Mr. Combrink’s voting
control which would signal a substantially disproportionate
redemption.
Third, an identical rationale, namely, no reduction in
deemed ownership, precludes the redemption from constituting a
complete termination of Mr. Combrink’s interest under section
302(b)(3).
Lastly, with respect to section 302(b)(4), the facts contain
no indication that LINKS or COST was involved in a plan of
partial termination. We therefore conclude that the December
1996 transaction is governed by section 302(d) and, accordingly,
that the tax effects thereof must be determined under section
301.
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