Proposed ‘hot dog stand’ regulations for spinoffs
The proposed regulations are intended to further limit a corporation’s ability to separate business assets from nonbusiness assets in a tax-free manner.
Reorganizations
When Entity Simplification Is Not So Simple
Carrying over E&P from one entity to another and administrative burdens can lead to headaches down the road.
Uncertainty Surrounding Back-to-Back F Reorganizations
The tension between the two principles of the new regulations can cause taxpayers uncertainty.
IRS Eliminates No-Rule Policy for Business Purpose and Device Rule Issues
The application of the business purpose and device rules often involves both legal and factual questions.
How to Document a Tax-Free D Reorganization With a Split-Off
A taxpayer that treats a split-off transaction as a tax-free D reorganization must be able to prove to the IRS that the transaction meets all requirements.
Transaction Pursuant to Qualified Stock Purchase Treated as Distribution in Liquidation
A Sec. 338 election can provide benefits to buyer and seller, but the transaction must be structured so that it satisfies the conditions to be a qualified stock purchase.
Acquired Taxpayer Is Not Eligible for Success-Based Fee Safe Harbor of Rev. Proc. 2011-29
An S corporation was not eligible to elect the safe harbor since it was the target of the acquisition, and it must capitalize the success-based fees that it claimed as an expense.
IRS Provides Safe Harbors for Acquisition of Control in Certain Corporate Transactions
The IRS issued guidance that provides safe harbors for corporations, under which the IRS will not assert that a distributing corporation lacks control of another corporation within the meaning of Sec. 355(a)(1)(A).
Double and Triple Drops With Liquidations Clarified in Pair of Revenue Rulings
This item discusses these rulings along with the technical aspects surrounding their issuance and addresses whether the IRS reached the right results.
Tax-Free REIT Spinoffs Are Curtailed
The IRS issued regulations restricting the ability of C corporations to use this method.
New Legislation Restricts Tax-Free REIT Spinoffs
The legislation curbs a popular tax planning strategy by severely restricting the application of tax-free spinoff treatment.
Gain and Loss Recognition Under Sec. 356(c)
The Tax Court discussed the application of the “boot” rules under Sec. 356 in a tax-free reorganization.
Regulations Finalize Coordination Rules for Outbound Reorganizations
The IRS issued regulations that eliminate an exception to the coordination rule between asset transfers and indirect stock transfers for certain outbound asset reorganizations and modify an exception to the coordination rule.
Final F Reorganization Regs. Might Make Treatment Available for Reverse Mergers
A company that uses a reverse merger to go public generally would like to structure the merger as a tax-free reorganization.
IRS Finalizes Potential F Reorganization Rules
Corporations that meet six requirements will be able to effectuate F reorganizations tax-free in some cases.
Acquisition of Partnership Interest Constitutes an Expansion of Distributing Corporation’s Business
The IRS ruled that a distributing corporation’s acquisition of an interest in a partnership was not an acquisition of a new or different business.
IRS Expands Range of D Reorganizations, Highlights Importance of the Form of a Taxpayer’s Transaction
IRS rules expand the range of transactions that qualify as type D acquisitive asset reorganizations and signaled a greater willingness to accept a taxpayer’s chosen form of reorganization transaction.
Final Rules Govern F Reorganizations
The final rules apply a concept called a potential F reorganization, allowing the many steps of a corporate reorganization to be examined together to see if the transaction qualifies to be an F reorganization.
Dealing With ISOs and Disqualifying Dispositions in Reorganizations
A recent Chief Counsel advice provides guidance on disqualifying dispositions of incentive stock options in reorganizations.
IRS Issues Two Rulings on D Reorganizations
The IRS issued two corporate reorganization rulings, one of which involved a domestic corporation and a number of foreign subsidiaries while the second involved a reorganization of domestic entities with a limited liability company that elected to be a disregarded entity after the reorganization.
