The Inflation Reduction Act established a 1% excise tax on the fair market value of stock repurchases (often referred to as “buybacks”) made by certain publicly traded corporations after Dec. 31, 2022. The IRS has issued final regulations that explain the application of the tax and, generally, narrow its reach. For example, the final regs clarify that leveraged buyouts, take-private deals and restructurings that result in loss of public listing status aren’t considered repurchases for tax purposes. The final regs apply to stock repurchases made after Dec. 31, 2022. Contact us for more details.
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