Tax Rules: Final: 5703-5
5703-5-02 - Date as of which the
value of a taxpayer's issued and outstanding shares of stock
is determined
(A) This rule first applies for tax year 1990. It prescribes
the date as of which the value of a taxpayer's issued and
outstanding shares of stock is determined. The date for
valuing a taxpayer's issued and outstanding shares is
governed by the taxpayer's taxable year. Rule 5703-5-03 of
the Administrative Code prescribes the dates on which a
taxpayer's taxable year begins and ends. Rule 5703-5-01 of
the Administrative Code defines terms used in this rule.
(B) The value of a taxpayer's issued and outstanding shares
of stock under the net income basis shall be determined as of
the end of the taxable year prescribed in rule 5703-5-03 of
the Administrative Code. The determination of such value
shall be based upon income for, and property, payroll, and
sales during, the taxable year.
(C) The value of a taxpayer's issued and outstanding shares
of stock under the net worth basis shall be determined as of
the date immediately following the end of the taxable year
prescribed in rule 5703-5-03 of the Administrative Code. The
determination of such value shall be based upon net worth and
property on the date following, and business done during, the
taxable year.
(D) The following examples illustrate the application of this
rule:
(1) CORP-A has a taxable year prescribed in rule 5703-5-03 of
the Administrative Code that begins on July 1, 1988 and ends
on June 30, 1989.
(a) For tax year 1990, the value of CORP-A's issued and
outstanding shares of stock under the net income basis is
based upon net income for, and property, payroll and sales
during, the period July 1, 1988 to June 30, 1989.
(b) For tax year 1990, the value of CORP-A's issued and
outstanding shares of stock under the net worth basis is
based upon net worth and property on July 1, 1989 and
business done during the period July 1, 1988 to June 30,
1989.
(2) CORP-B has a taxable year prescribed in rule 5703-5-03 of
the Administrative Code that begins on January 1, 1989 and
ends on December 31, 1989. CORP-B acquires business assets
from an unrelated corporation in an acquisition effective
immediately following the close of business on December 31,
1989. CORP-B's closing books and records as of December 31,
1989 do not reflect the acquisition, but its opening books
and records as of January 1, 1990 do.
(a) For tax year 1990, the value of CORP-B's issued and
outstanding shares of stock under the net income basis is
based upon net income for, and property, payroll and sales
during, 1989.
(b) For tax year 1990, the value of CORP-B's issued and
outstanding shares of stock under the net worth basis is
based upon net worth and property on January 1, 1990 and
business done during 1989.
Effective: 12-30-89
Promulgated under: 5703.14
Authorized by: 5703.05
Amplifies: 5733.031, 5733.04, 5733.05
Prior effective dates: 1-1-72