News & Analysis as of

Section 355 Internal Revenue Code (IRC)

Cooley LLP

Recent Release of Updated Procedures for Section 355 Private Letter Rulings

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The US Department of the Treasury (Treasury Department) and the IRS recently released Revenue Procedure 2024-24 (Revenue Procedure) and Notice 2024-38 (Notice) establishing revised standards and procedures for taxpayers...more

Jones Day

Internal Revenue Service Alters Its View on Section 355 Spin-Offs

Jones Day on

The Internal Revenue Service ("IRS") recently issued important guidance identifying new positions the IRS is considering on critical aspects of tax-free spin-offs, and significantly expanding the information that taxpayers...more

Farrell Fritz, P.C.

You Can Spin It Off Or Split It Up, But Keep It Active

Farrell Fritz, P.C. on

A couple of months back, a local business reporter asked whether I could identify one kind of corporate transaction that was occupying more of my time than any other. When I asked whether they were referring to any specific...more

Wilson Sonsini Goodrich & Rosati

IRS Ruling May Signal Relaxation of "Collection of Income" Prong of Section 355 Active Trade or Business Test

On May 17, 2019, the Internal Revenue Service (IRS) published private letter ruling 201920008 (the PLR), which concluded that a transaction qualifies as a tax-free spin-off under Section 355 despite the fact that the...more

Bracewell LLP

Spin Me Right Round: Recent Developments Impacting Tax-Free Spin-Offs

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In our recent article on spin-offs (click here), we discussed an announcement made by the Internal Revenue Service (IRS) signaling a change in the application of the active trade or business (ATB) requirement under Section...more

Dickinson Wright

Using Tax-Free Section 355 Split-Off In Corporate Division

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Sometimes, it becomes necessary for a corporation to be divided, in which a shareholder or a group of shareholders would separate from the corporation and take with them a business division, unit or location. Parties...more

Troutman Pepper

Tax Developments in 2016: Federal Tax (Part I) - Sections 355, 382, and 385; and new rules on partnership audits dominate...

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Section 385 Proposed Regulations — Impact on Related-Party Financing - Section 385 has been in the Internal Revenue Code since 1969. It was enacted to provide guidance for whether to classify an interest in a corporation...more

Troutman Pepper

When a 'Business Expansion' Can Satisfy the Active Trade or Business Requirement in Section 355 Distributions - Volume 2016, Issue...

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The active trade or business rules are detailed and highly fact specific, and the IRS continues to refine its view on the qualification requirements. In order to separate two businesses housed in one corporation or in a...more

Proskauer - Tax Talks

IRS Updates Ruling Policy on Corporate Business Purpose and Device Requirements under Section 355

Proskauer - Tax Talks on

The U.S. Internal Revenue Service (“IRS”) released Revenue Procedure 2016-45 (the “Revenue Procedure”) on August 26, 2016, permitting taxpayers once again to seek private letter rulings on issues of “corporate business...more

Proskauer Rose LLP

Proposed Regulations under Section 355 Clarify Device and Active Trade or Business Requirements for Tax-Free Spin-offs

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On July 15, 2016, the U.S. Internal Revenue Service (IRS) and the Department of the Treasury (Treasury) published proposed regulations that would modify the device and active trade or business requirements for tax-free...more

Troutman Pepper

Section 355 Guidance: More Clarity and New Tests on Device, Active Trade or Business and Distribution of Control

Troutman Pepper on

The recent guidance under section 355 is a significant attempt by the IRS to clarify in a formal way what it historically has been able to do on a case-by-case basis through the private letter ruling process....more

Goodwin

IRS Announcements Create Market Uncertainty for REIT Spin-Offs

Goodwin on

In issuing IRS Notice 2015-59 and Rev. Proc. 2015-43 last week, the IRS intentionally created significant market uncertainty about the viability of “PropCo/OpCo” spin-offs as part of the PropCo’s REIT conversion (e.g., where...more

McDermott Will & Emery

IRS Issues Another Significant Ruling on Spin-off of Real Estate

In certain recent transactions, a corporation distributes a subsidiary corporation holding the distributing corporation’s real estate assets to the distributing corporation’s shareholders in a tax-free “spin-off.” Not only...more

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