Reorganizations

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.

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.

Regulations Finalize Rules on All-Cash D Reorganizations

The IRS finalized temporary regulations regarding the determination of the basis of stock or securities in all-cash D reorganizations where no stock or securities of the issuing corporation is issued and distributed in the transaction.

Sec. 351 Control Requirement: Opportunities and Pitfalls

Sec. 351 allows a tax-free incorporation transfer if certain requirements are met, including that the property must be transferred to a corporation by one or more persons in exchange for stock in the corporation, and, immediately after the exchange, the transferor(s) is (are) in control (as defined in Sec. 368(c)) of the corporation.

Earnout Restriction Causes Substantial Risk of Forfeiture

The Tax Court held that sections of a restricted stock agreement and an employment agreement read together constituted an earnout restriction that might create a substantial risk of forfeiture for stock transferred to an employee.

Hook Stock and Sec. 355: Did a Distribution Occur?

By invoking an exception to the requirement that a distributing corporation must distribute “all of the stock and securities in the controlled corporation,” the IRS implicitly held that a distribution on hook stock should not be respected.

Sec. 336(e) Election Regulations Are Issued

The IRS issued final regulations on the rules that apply when an election under Sec. 336(e) is made to treat the sale, exchange, or distribution of at least 80% of the voting power and value of a target corporation’s stock as a sale of all its underlying assets.

Proactive Elections to Mitigate Sec. 382 Applicability

Sec. 382, which limits the use of NOL carryovers after an ownership change of a loss corporation, often comes as a rude surprise to corporations in the fields of technology, life sciences, pharmaceutical, and similar industries.

Newsletter Articles

50th ANNIVERSARY

50 years of The Tax Adviser

The January 2020 issue marks the 50th anniversary of The Tax Adviser, which was first published in January 1970. Over the coming year, we will be looking back at early issues of the magazine, highlighting interesting tidbits.

PRACTICE MANAGEMENT

2019 tax software survey

This annual survey shows how CPAs rate the tax preparation software they used during last tax season and how it handled the recent tax law changes.