A bill to amend the Internal Revenue Code of 1954 to impose a 50 percent nondeductible excise tax on certain profits realized in connection with corporate takeover attempts, and for other purposes.

Summary

Amends the Internal Revenue Code to impose a 50 percent excise tax on any "greenmail profits" paid to certain corporate stockholders. Defines "greenmail profits" as any gain realized by a four-percent shareholder of any stock in a corporation if: (1) the shareholder held such stock for a period of less than two years; and (2) during the two-year period ending on the date of the sale or exchange of such stock there was a public tender offer for such stock. Requires that a hostile stock purchase in a corporate takeover attempt be treated as an asset acquisition by the purchasing corporation. Disallows an income tax deduction for any interest paid or accrued on indebtedness incurred to acquire stock in a corporation pursuant to a hostile offer.

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1 official file

• Introduced in Senate

  summary · EN · 6 February 1985

  Open at official source

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