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.
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Formation, Liquidation & 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.
Rulings Illustrate Transactions That Qualify as D Reorganizations
The IRS issued two rulings on transactions that qualify as D reorganizations and revoked Rev. Rul. 78-130.
Tax Considerations for Cancellation-of-Debt Income
This item provides an overview of the U.S. income tax implications of cancellation-of-debt income that results from bankruptcy or insolvency, with a focus on the differences in the tax treatment for C corporations, S corporations, and partnerships.
Basis Allocation to Nonshareholders in All-Cash D Reorganizations Prohibited
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 are issued and distributed in the transaction.
IRS Issues Final Regulations on Allocation of Earnings and Profits
Final regulations under Sec. 381 will change which corporation succeeds to the tax attributes, including the E&P, of the transferor or distributor corporation in certain acquisitions.
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.
Final Rules Determine How E&P Is Treated in Corporate Reorganizations
New rules under Sec. 381 will change which corporation succeeds to the tax attributes, including the earnings and profits (E&P), of the transferor or distributor corporation in certain acquisitions.
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.
Proposed Rules Would Amend Definition of Acquiring Corporation in Corporate Reorganizations
The IRS issued proposed regulations under Sec. 381 that in certain acquisitions would change which corporation succeeds to the tax attributes, including the E&P, of the transferor or distributor 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.
IRS Issues New Final and Temporary Regulations on Outbound Reorganizations
The IRS recently issued temporary and final regulations addressing certain outbound transfers of property, indirect stock transfers, and certain outbound asset reorganizations.
Defining Stock of Insolvent and Bankrupt Corporations
This article discusses the special rules and issues surrounding the classification of stock ownership of corporations that are insolvent or in bankruptcy.
Questions on EINs in F Reorganizations Involving Disregarded Entities
Until the IRS issues clarifying guidance on whether a corporation that converts to an LLC always must retain its historic EIN, potential procedural conflicts may exist in relying on Rev. Rul. 73-526 to retain an EIN in an F reorganization.
Failing Subchapter C Requirements to Avoid Nonrecognition Treatment
If a transaction satisfies the substantive tests for certain subchapter C nonrecognition provisions, can the taxpayer nonetheless achieve a taxable exchange by intentionally violating procedural requirements?
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.
IRS Issues “No-Rule” Orders on Several Sec. 355 Transactions
The IRS recently put an abrupt halt to its ruling practice with respect to several transactions in the Sec. 355 area for which rulings had previously become routine.
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.
employee benefits & pensions
Profits interests: The most tax-efficient equity grant to employees
By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.
