A bill to amend the Internal Revenue Code of 1954 to ensure stockholder protection with respect to the treatment of amounts received in certain corporate acquisitions, and for other purposes.

Summary

Amends the Internal Revenue Code to treat as ordinary income any gain realized by any one-percent (or more) stockholder in a stock sale transaction in which the consideration per share of stock exceeds the prevailing market price for such stock. Disallows all corporate income tax deductions attributable to such a transaction. Disallows corporate income tax deductions for any amounts paid by a corporation under a management protection agreement. Defines "management protection agreement" as any agreement in which the corporation guarantees continued payments to an employee whose employment is terminated within a specified period after a change in the ownership or control of the corporation. Exempts management protection agreements which do not discriminate in favor of highly compensated employees. Requires the beneficiary of a management protection agreement to include any payments received in gross income as ordinary income.

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Documents

1 official file

• Introduced in House

  summary · EN · 10 November 1983

  Open at official source

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