The Aftermath of a Section 355 Transaction (Parts 1 and 2)
Herbert N. Beller
Northwestern University - School of Law; Sutherland Asbill & Brennan LLP
Sutherland Asbill & Brennan LLP - Washington, D.C. Office
January 9, 2014
Corporate Taxation, p. 3, November-December 2013 (Part 1), and Corporate Taxation, p. 3, January-February 2014 (Part 2)
Northwestern Public Law Research Paper No. 13-39
Northwestern Law & Econ Research Paper No. 13-38
This two-part article explores a wide variety of situations in which the tax-free treatment of corporate spin-offs and other separations under section 355 of the Internal Revenue Code can be jeopardized by transactions or other events that occur after the separation has been completed. Part 1 reviews the statutory and nonstatutory requirements of section 355 transactions and then focuses on (i) deviations from the purported business purpose for the spin and (ii) post-spin transactions involving dispositions of assets by the distributing of the spun-off corporation. Part 2 covers (i) post-spin transactions involving dispositions or new issuances of the stock of the distributing corporation; (ii) important recent changes in IRS ruling policy with respect to section 355 transactions; and (iii) common analytic themes for assessing, and suggestions for minimizing potentially adverse tax implications of post-spin developments.
Number of Pages in PDF File: 58
Keywords: corporate spin-offs, section 355, tax-free corporate separations
JEL Classification: K34Accepted Paper Series
Date posted: November 22, 2013 ; Last revised: February 7, 2014
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