26 CFR · Internal Revenue
§ 1.404(k)-3 — Disallowance of deduction for reacquisition payments.
26 CFR § 1.404(k)-3
This text of 26 C.F.R. § 1.404(k)-3 (Disallowance of deduction for reacquisition payments.) is published on Counsel Stack Legal Research, covering United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Bluebook
26 C.F.R. § 1.404(k)-3 (2026).
Text
§ 1.404(k)-3 Disallowance of deduction for reacquisition payments. Q-1: Are payments to reacquire stock held by an ESOP applicable dividends that are deductible under section 404(k)(1)? A-1:
(a)Payments to reacquire stock held by an ESOP, including reacquisition payments that are used to make benefit distributions to participants or beneficiaries, are not deductible under section 404(k) because—
(1)Those payments do not constitute applicable dividends under section 404(k)(2); and
(2)The treatment of those payments as applicable dividends would constitute, in substance, an avoidance or evasion of taxation within the meaning of section 404(k)(5).
(b)See also § 1.162(k)-1 concerning the disallowance of deductions for amounts paid or incurred by a corporation in connection with the rea
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Related
Nearby Sections
11
§ 1.404(e)-1
§ 1.404(e)-1 [Reserved]§ 1.404(g)-1
Deduction of employer liability payments.§ 1.404(k)-1T
Questions and answers relating to the deductibility of certain dividend distributions. (Temporary)§ 1.406-1
Treatment of certain employees of foreign subsidiaries as employees of the domestic corporation.§ 1.408-1
General rules.§ 1.408-2
Individual retirement accounts.§ 1.408-3
Individual retirement annuities.Cite This Page — Counsel Stack
Bluebook (online)
26 C.F.R. § 1.404(k)-3, Counsel Stack Legal Research, https://law.counselstack.com/cfr/26/1/1.404(k)-3.