The Aftermath of a Section 355 Transaction (Parts 1 and 2)

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

58 Pages Posted: 22 Nov 2013 Last revised: 7 Feb 2014

Date Written: January 9, 2014

Abstract

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.

Keywords: corporate spin-offs, section 355, tax-free corporate separations

JEL Classification: K34

Suggested Citation

Beller, Herbert N. and Pauls, William, The Aftermath of a Section 355 Transaction (Parts 1 and 2) (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. Available at SSRN: https://ssrn.com/abstract=2358176

Herbert N. Beller (Contact Author)

Northwestern University - Pritzker School of Law ( email )

375 East Chicago Avenue
Chicago, IL 60611
United States

Sutherland Asbill & Brennan LLP ( email )

700 Sixth St., NW
Washington, DC 20001
United States
(202) 383-0120 (Phone)

William Pauls

Deloitte Tax LLP ( email )

555 12th Street, NW
Suite 400
Washington, DC 20004-1207
United States
(202) 220-2059 (Phone)

HOME PAGE: http://www.deloitte.com

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