[Code of Federal Regulations]
[Title 26, Volume 7]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.565-4]

[Page 307]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.565-4  Consent dividends and other distributions.

    Section 565(d) provides a rule applicable where a distribution is 
made in part in consent dividends and in part in money or other 
property. With respect to such a distribution the entire amount 
specified in the consents and the amount of such money or other property 
shall be considered together. Thus, if as a part of the same 
distribution consents are filed by some of the shareholders and cash is 
distributed to other shareholders, for example, those who may be 
unwilling to sign consents, the total amount of the cash and the amounts 
specified in the consents will be viewed as a single distribution to 
determine the tax effects of such distribution. For example, the total 
of such amounts must be considered to determine whether the distribution 
(including the amounts specified in the consents) is preferential and 
whether any part of such distribution would not be dividends if the 
total amounts specified in the consents were distributed in cash. See 
paragraph (b)(2) of Sec. 1.565-2 for examples illustrating the 
treatment of distributions which consist in part of consent dividends 
and in part of other property.