Corporation Formation, Liquidation & Reorganization

Topics

May 1, 2007

Acquisitive Transactions when Acquiring Corporation Issues No Stock

Temporary regulations (TD 9313; NPRM REG-157834-06, 3/1/07) clarify older temporary regulations (TD 9303, 12/18/06) by providing that the deemed issuance of a nominal share of stock of a transferee corporation in a transaction otherwise described in Sec. 368(a)(1)(D) (a D reorganization) does not apply if the transaction otherwise qualifies as

April 1, 2007

S Holding Companies and F Reorgs.

In yet another in a series of F reorganization rulings, the IRS issued Letter Ruling 200701017, holding that the formation of a new corporation, followed by the contribution of S stock and an immediate qualified subchapter S subsidiary (QSub) election, will be treated as an F reorganization (i.e., a mere

April 1, 2007

Final Basis Regs. Provide Deferral Opportunities in Tax-Free Exchanges

Co-Editors: Michael Metz, CPA; Nick Gruidl, CPA, MBT Final regulations addressing basis and boot in reorganizations provide interesting and unexpected results. Secs. 358 and 356 address allocation of basis to property received in a reorganization and gain recognition on receipt of boot, respectively. Proposed regulations (REG-116564-03, 5/3/04) provided a tracing