Tammy owns 100 shares in Star Struck Corporation. The other 100 shares are owned by her husband, Tommy. Which of the following statements is true?
A) A stock redemption that completely terminates Tammy's direct interest in a corporation will be treated as an exchange for tax purposes.
B) A stock redemption that completely terminates Tammy's direct interest in a corporation will be treated as a dividend for tax purposes.
C) A stock redemption that completely terminates Tammy's direct interest in a corporation will be treated as an exchange if Tammy waives the family attribution rules and files a "triple i" agreement with the IRS.
D) A stock redemption that completely terminates Tammy's direct interest in a corporation will be treated as a dividend to the extent that the redemption exceeds Tammy's tax basis in the redeemed shares.
Answer: C