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2023

Frequently Asked Questions About the Stock Buyback Tax Under the Inflation Reduction Act of 2022 (April 27, 2023)

Heads Up | Volume 30, Issue 7
April 27, 2023
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Frequently Asked Questions About the Stock Buyback Tax Under the Inflation Reduction Act of 2022

Footnotes

1
Internal Revenue Code Section 4501, “Repurchase of Corporate Stock.”
2
For titles of FASB Accounting Standards Codification (ASC) references, see Deloitte’s “Titles of Topics and Subtopics in the FASB Accounting Standards Codification.”
3
AICPA Technical Questions and Answers Section 4110.09, “Costs Incurred to Acquire Treasury Stock.”
4
See Questions 3 and 4 for the accounting for certain preferred stock instruments.
5
However, because of the complexities of this approach, we would not expect it to be widely used in practice.
6
Note that this assessment differs from the requirement in ASC 480-10-S99-3A to assess whether it is probable that the preferred stock instrument will become redeemable.
7
If the instrument is preferred stock, see Questions 2 and 3.