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Rev. Rul. 56-566


Rev. Rul. 56-566; 1956-2 C.B. 888

DATED
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Citations: Rev. Rul. 56-566; 1956-2 C.B. 888

Obsoleted by Rev. Rul. 69-227

Rev. Rul. 56-566

To facilitate investment in its stock by residents of the United States, a foreign corporation has entered into a deposit agreement with a United States bank. A stockholder's ownership of the corporation's stock is represented by a certificate in bearer form. In order that a stockholder may sell a part of his stock without transmitting his certificate to the foreign location of the corporation, the bank has on deposit a designated number of shares and makes available for exchange bearer certificates covering various denominations of shares. In this manner, a stockholder may exchange his certificate, representing a certain number of shares, for two or more certificates representing in the aggregate the same number of shares. Held, such exchanges of certificates, wherein there is no change in stockholders and no change in aggregate stockholders, are not transfers of legal title and are not subject to the documentary stamp tax imposed by section 4321 of the Internal Revenue Code of 1954.

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