# Treas. Reg. § 1.303-3: Application of other sections.

Source: eCFR as of 2026-10-19 <https://www.ecfr.gov/current/title-26/section-1.303-3>. Interprets 26 U.S.C. § 303.

(a) The sole effect of section 303 is to exempt from tax as a dividend a distribution to which such section is applicable when made in redemption of stock includible in a decedent's gross estate. Such section does not, however, in any other manner affect the principles set forth in sections 302 and 306. Thus, if stock of a corporation is owned equally by A, B, and the C Estate, and the corporation redeems one-half of the stock of each shareholder, the determination of whether the distributions to A and B are essentially equivalent to dividends shall be made without regard to the effect which section 303 may have upon the taxability of the distribution to the C Estate. 

(b) See section 304 relative to redemption of stock through the use of related corporations.