A host of new issues have arisen in merger-and-acquisition transactions because of
the unpredictable business environment caused by changes in the law in response
to the COVID-19 pandemic. This article discusses some of the pandemic-related
concerns buyers and sellers will have in M&A transactions, and the additional safeguards
and procedures participants should take to deal with these concerns.
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Topics
Formation, Liquidation & Reorganization
Characterizing multistep transactions: Form can make the difference
This discussion explores the step transaction doctrine and the facts, analysis, and rulings of Rev. Ruls. 2001-46 and 2008-25, then analyzes the rulings to illustrate how form can make a difference
in multistep transactions.
Tax-efficient dispositions of assets
This article discusses ways taxpayers can structure transactions according to the form that has the most beneficial tax result.
Proposed rules would govern built-in gains and losses
The IRS issued proposed regulations that provide a safe harbor for corporations to calculate built-in gains and losses after an ownership change.
Built-in gains and losses subject of new proposed regs.
The IRS issued proposed regulations that provide a safe harbor for corporations to calculate built-in gains and losses after an ownership change.
Application of new life insurance reportable policy sale rules to M&A transactions
Recently issued proposed regulations on the transfer of life insurance contracts create significant uncertainty regarding their application to tax-free asset acquisitions.
Impact of S corp. shareholder agreements in M&A transactions
Shareholders and their advisers should be prepared to verify the validity of the S election when the decision is made to begin marketing the company
for sale.
Allocating previously taxed income in a Sec. 355 tax-free distribution
This discussion explores the allocation of E&P in a distribution to which Sec. 355 applies.
IRS suspends spinoff revenue rulings
The IRS announced that it is reviewing its approach to the active trade or business requirement that must be met for a five-year period for a business to qualify for a tax-free spinoff under Sec. 355 and, as a result, is suspending two revenue rulings, Rev. Ruls. 57-464 and 57-492, in which it previously ruled on the topic.
Structuring divisive reorganizations
Tax-free corporate reorganizations, or divisions, can be achieved with split-ups, splitoffs, and spinoffs. A consideration of the reason for the corporate division should guide the determination of which technique would be most beneficial.
IRS reevaluating active trade or business requirement for spinoffs
The IRS announced that it is reviewing its approach to the active trade or business requirement that must be met for a five-year period for a business to qualify for a tax-free spinoff under Sec. 355 and, as a result, is suspending two revenue rulings, Rev. Ruls. 57-464 and 57-492, in which it previously ruled on the topic.
Corporate transactions’ effect on retirement plans
This article discusses several key factors that CPAs and benefit plan advisers should consider to help successfully integrate plans during a merger or acquisition.
Upstream, downstream: Upstream C reorganizations with a drop
The transaction accomplishes a distribution of assets to the parent, which may be effected in a tax-free manner only in limited circumstances.
IRS revisits General Utilities repeal
Provisions relating to the repeal of the General Utilities doctrine may again face scrutiny.
When to use a tax-free reorganization
In some circumstances, a taxable stock sale may make more sense.
Leased farmland and the active business requirement for a tax-free reorganization
Meeting the active trade or business requirement is critical to ensuring a corporation leasing farmland qualifies for a tax-free divisive reorganization.
Substantive consolidation: A tale of two cases
Because there is no clear statutory guidance for how a bankruptcy judge determines if a trustee’s request to apply substantive consolidation should be granted, each case is different.
IRS announces it will rule on tax-free stock distributions
The IRS is introducing an 18-month pilot program under which it will once again issue letter rulings concerning the general income tax effects of stock distributions under Sec. 355.
Letter ruling provides guidance on distributions in a reorganization
The IRS ruled on how the distribution of stock is treated in a tax-free reorganization and whether there is any potential recognition of gain.
Net value requirement for tax-free reorganization treatment withdrawn
The IRS withdrew rules it proposed in 2005 that would have required certain corporate formations and reorganizations to meet net value requirements before they would qualify for nonrecognition treatment.
TAX PRACTICE MANAGEMENT
2025 tax software survey
AICPA members in tax practice assess how their return preparation software performed during tax season and offer insights into their procedures.
