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Subsidiaries Tax-Free Spin-Offs

Wilson Sonsini Goodrich & Rosati

IRS Permits Pre-Revenue Company to Undertake a Tax-Free Spin-Off

On November 18, 2022, the Internal Revenue Service (IRS) published private letter ruling 202246008 (the PLR), which concluded that a transaction qualifies as a tax-free spin-off under Section 3552 despite the fact that the...more

Skadden, Arps, Slate, Meagher & Flom LLP

Build Back Better Act Would Change Monetization Playbook for Tax-Free Spin-Offs

Takeaways - Tax law changes in the Build Back Better Act (BBBA) would limit the amount of value a company could extract in a spin-off by using a debt-for-debt exchange. Companies may be able to achieve most of the...more

Cadwalader, Wickersham & Taft LLP

Breaking Up: Case Study on GE’s Proposed Spin-Offs

The Cadwalader Tax team has prepared a case study summarizing General Electric’s recently announced plans to split into three publicly traded companies through sequenced tax-free spin-off transactions. ...more

Farrell Fritz, P.C.

Tax-Free Spin-Off? That May Depend . . . On Post-Spin-Off Events

Farrell Fritz, P.C. on

The Break-Up- After a tense period of disagreement and stalemate, the threaten of litigation, the ensuing economic and emotional stress, Client and their former fellow-shareholder (“Departing”) – and onetime friend, before...more

Bracewell LLP

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

Bracewell LLP on

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

Smith Anderson

Spin-off Revival: IRS Rethinks the Active Trade or Business Requirement

Smith Anderson on

The “five-year active trade or business” or “ATB” requirement of section 355 is notorious for defeating many otherwise promising tax-free spin-off transactions. Consider the following common scenarios... Originally...more

Proskauer - Tax Talks

IRS Resumes Issuing Transactional Spin-Off Rulings

Proskauer - Tax Talks on

On September 21, 2017, the Internal Revenue Service (the “IRS”) issued Revenue Procedure 2017-52 (the “Rev. Proc.”), introducing an 18-month “pilot program” in respect of corporate “spin-off,” “split-up” and “split-off”...more

Jones Day

IRS Will Resume Ruling on Important Spin-Off Issues

Jones Day on

The IRS recently provided taxpayers with favorable guidance involving tax-free spin-offs. First, the IRS will resume issuing private rulings that allow a distributing corporation to satisfy debt it issued in anticipation of a...more

Proskauer - Tax Talks

IRS Issues Guidance on “North-South” Transactions

Proskauer - Tax Talks on

On May 3, the Internal Revenue Service (the IRS) issued Revenue Ruling 2017-09 (the “Ruling”), which helpfully clarifies that the separate steps of a typical “north-south” spinoff transaction will be respected, and announced...more

Skadden, Arps, Slate, Meagher & Flom LLP

"IRS Offers Limited Safe Harbors for Recapitalizations Before Spin-Offs"

On July 15, 2016, the Internal Revenue Service (IRS) released a new revenue procedure, Rev. Proc. 2016-40, providing safe harbors for transactions in which a corporation (Distributing) obtains the requisite control of a...more

Skadden, Arps, Slate, Meagher & Flom LLP

"Proposed Treasury Regulations Raise New Hurdles for Tax-Free Spin-Offs"

On July 14, 2016, the Internal Revenue Service (IRS) and Treasury Department proposed new Treasury regulations that, if finalized, would generally become effective for distributions under Section 355 of the Internal Revenue...more

Pillsbury Winthrop Shaw Pittman LLP

Five Things about the IRS’s Proposed Regulations on the Spinoff Device and Active Business

On July 14, 2016, the Internal Revenue Service (IRS) proposed long-anticipated regulations tightening the “device” and “active trade or business” tests that are necessary for a corporation to distribute a subsidiary in a...more

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