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.
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Formation, Liquidation & Reorganization
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.
IRS Allows Sec. 338(h)(10) Election Made During Spinoff of Selling Corporation
In Letter Ruling 201220020 the IRS integrated an internal stock sale followed by a spinoff and ruled that the internal stock sale was eligible for a Sec. 338(h)(10) election.
Measuring Insolvency Under Sec. 108
While determining if a taxpayer is bankrupt is straightforward, determining whether a taxpayer is insolvent can be tricky.
IRS to Allow Automatic Accounting Method Changes in Corporate Reorganizations
The IRS announced a change in its policy on automatic accounting method changes in corporate reorganizations.
Automatic Accounting Method Changes to Be Allowed in Corporate Reorganizations
The IRS announced a change in its policy on automatic accounting method changes in corporate reorganizations.
Application of the Consolidated Tax Return Rules to Insolvent Members
The tax treatment of an insolvent debtor realizing discharge of indebtedness income under the U.S. consolidated income tax return rules can vary considerably depending on the particular circumstances.
New Rules Aim to Shut Down Certain Outbound Asset Reorganizations
The IRS issued rules to govern certain outbound asset reorganizations involving the transfer of intangibles under Sec. 367(d) that will apply instead of existing regulations
Post-Deal Depreciation: Impact of Certain Nonrecognition Transactions
When planning an incorporation or reorganization transaction, taxpayers and their advisers may not examine in depth the related accounting method and depreciation issues that arise as a result of the transaction.
Intercompany Debt in a Deemed Asset Sale Election
This item discusses IRS guidance illustrating the impact of extinguishment of intercompany debt immediately preceding a Sec. 338(h)(10) election.
Proposed Regs. Would Require E&P to Be Allocated to Acquiring Corporations in Corporate Reorganizations
The IRS has proposed amending existing regulations under Sec. 312 and Sec. 381 to clarify that in certain corporate reorganizations, the “acquiring corporation” succeeds to the full E&P account of the transferor corporation.
Double-Tax Trap in a Sec. 338(h)(10) Transaction
When a corporate buyer purchases the stock of a target corporation from a selling consolidated group, Sec. 338(h)(10) offers the opportunity for the Buyer to obtain a step-up in basis for the assets owned by Target.
Potential Pitfall Associated with Reorganizations Involving Chinese Subsidiaries
When a U.S. company wants to reorganize a worldwide structure that includes Chinese entities, tax issues should be carefully considered to avoid any unforeseen Chinese tax liability.
Losses Related to an Insolvent Corporation
The IRS issued a general legal advice memorandum that addressed the tax consequences when an insolvent foreign subsidiary of a domestic U.S. corporation elected to be classified as a partnership.
Final “Hot Stock” Regs. and Dunn Trust
In October 2011, Treasury issued final regulations that deal with the application of the Sec. 355(a)(3)(B) “hot stock” rule (T.D. 9548).
Regulations Issued on Continuity of Interest Rule for Corporate Reorganizations
The IRS issued final and proposed regulations on the continuity of interest (COI) requirement in Sec. 368 corporate reorganizations.
Alternative Basis Step-up Transactions: Leveraging Disregarded Entities in an F Reorg.
The disregarded entity has created numerous opportunities for well-advised taxpayers to accomplish transactions that may not have previously been feasible.
Temporary Regs. on All-Cash D Reorgs Issued
The IRS issued temporary and proposed regulations governing the determination of the basis of stock or securities in a corporate reorganization when the issuing corporation does not distribute any stock or securities in the reorganization.
Updated Guidance on the Determination of Basis of Stock in Transferred Basis Transactions
Rev. Proc. 2011-35 provides four safe-harbor methodologies that a corporation may use to establish its basis in the stock of another corporation in a type B reorganization or certain other transferred basis transactions.
Final Regs. Eliminate Hot Stock Rule for Certain Reorganizations
The IRS issued final regulations that generally hold that the so-called hot stock rule is inapplicable in reorganizations where a subsidiary is a member of the distributing corporation’s separate affiliated group
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.
