With the exception of distributions in liquidation, the following transactions between an organization and its shareholders or interest-holders shall be considered a dividend:

1. (a) All property transferred from an organization to a shareholder or interest-holder with respect to the shareholder's or interest-holder's ownership interest from the accumulated profits of the organization;
2. (b) All personal expenditures made by an organization on behalf of a shareholder or interest-holder which have not been properly reported as compensation or loans for federal income tax purposes;
3. (c) Forgiveness of a shareholder or interest-holder's indebtedness to the organization; and
4. (d) The automatic re-investment of property distributed from current year’s or accumulated profits into additional stock.

Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by #8137, eff 8-10-04; ss by #9658, eff 2-24-10; ss by #9843, eff 12-23-10 (see Revision Note at chapter heading for Rev 900); ss by #10211, eff 10-24-12; ss by #13443, eff 8-12-22