The facts are the same as in Example 1, except that P purchases 60 shares of T stock on January 1 of Year 1 and none on December 1 of Year 1.
P makes a qualified stock purchase of T on July 1 of Year 1, because that is the first day on which the T stock purchased by P within the preceding 12-month period satisfies the 80-percent ownership requirements of section 338(d)(3) (i.e., 60/75 shares), determined by taking into account the redemption of 25 shares.
P buys 60 shares of T from A on January 1 of Year 1 and makes no further purchase that year.
T’s July 1 redemption of 25 shares from A drops T’s outstanding stock to 75 shares.
On the redemption date, P’s 60 shares equal 80 percent of the 75 outstanding shares, satisfying section 338(d)(3).
July 1 of Year 1 is the first day the 12-month and 80-percent tests are both met, so the qualified stock purchase occurs then.
