Capital loss rules limit deduction of fees paid to terminate merger agreement
Chief Counsel Advice provides insight to taxpayers planning or negotiating merger-and-acquisition transactions.
Formation, Liquidation & Reorganization
Freezing stock value with a corporate recapitalization
A corporate recapitalization can freeze the value of the owner’s stock, potentially reducing the owner’s estate tax liability by removing future appreciation in the value of stock from the owner’s estate.
E&P planning opportunities when acquiring subsidiaries
The tax impact on future shareholder distributions should be considered prior to liquidating an acquired subsidiary.
Acceleration of deferred revenue in M&As
Sec. 451(c) should be considered when structuring such M&A transactions — including special rules relating to short tax years of 92 days or less.
Critical valuation issues that arise in common corporate transactions
This discussion provides an overview of some of the critical valuation issues that arise in Secs. 351, 332, and 338.
Handling tax issues related to noncompete agreements
Covenants not to compete can protect a company’s interest as long as they are drafted in an appropriate manner, but their 15-year amortization period can cause issues.
Planning for an IPO: Is your tax department prepared?
Depending on the IPO structure, the company may need to provide tax accruals for additional reporting periods or updates to existing financial statement disclosures.
The built-in gains tax
The built-in gains tax applies to C corporations that make an S corporation election, and it can be assessed during the five-year period starting with the first tax year for which the S election is effective.
Summary of tax rules for liquidating corporations
If a corporation is terminating or intending to convert to an LLC taxed as a partnership, the liquidation regulations will apply.
Private equity and F reorganizations involving S corporations
The M&A market is poised to regain its pre-COVID-19 activity levels as many business owners seek to exit closely held businesses or explore alternatives. One popular transaction that could emerge is Sec. 368(a)(1)(F) reorganizations F reorganizations) of S corporations.
State and local considerations in using an F reorganization to facilitate an acquisition
Foresight of the potential state tax implications of an F reorganization will allow a seller to evaluate the lesser-known hazards.
Mergers and acquisitions during the COVID-19 pandemic
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.
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.
