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.
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Formation, Liquidation & Reorganization
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.
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.
INDIVIDUALS
Current Developments in Taxation of Individuals: Part 1
This update surveys recent federal tax developments involving individuals, including court cases, rulings, and guidance issued during the six months ending October 2025.
