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Redemption

A buying back, or a repurchase. A redemption of stock is its repurchase from the stockholder by the corporation which issued it (whether or not it had originally been issued to the stockholder from whom it is repurchased). A bona fide redemption of stock is treated as a sale or exchange of the stock and, in the case of a taxpayer other than a dealer in securities, gain or loss on the redemption is a capital gain or loss.