In December, the Treasury published temporary and proposed regulations clarifying the application of Section 355(e) when the distributing (D) corporation or the controlled (C) corporation has a predecessor (P) or successor (S). Section 355(e)(4)(D) states that references to D and C shall include a reference to P and S of such corporations. It purports to be effective without regulations. But practitioners have raised many questions about the meaning of this rule.
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