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Tax-Free Spin-Offs

McDermott Will & Emery

Protecting Employees’ Tax Position After a Spin-off

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Spin-offs have become increasingly popular with innovative companies as a method of unlocking shareholder value, but the transaction is not always tax-free, particularly for international employees holding equity awards or...more

White & Case LLP

Charting a path for European carve-outs

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As central banks continue their campaign to cool inflation, interest rates remain at elevated levels not seen in well over a decade. For companies, this makes funding growth initiatives and refinancing existing debt much more...more

Skadden, Arps, Slate, Meagher & Flom LLP

The Informed Board - Spring 2024

Artificial intelligence is not just about chatbots. Increasingly, it is used by government for enforcement, and boards need to prepare for that, just as they need to get ready for upcoming climate disclosure requirements....more

Skadden, Arps, Slate, Meagher & Flom LLP

New IRS Ruling Guidelines Significantly Impact Tax-Free Spin-Offs

On May 1, 2024, the Treasury Department (Treasury) and Internal Revenue Service (IRS) released Revenue Procedure 2024-24 (Revenue Procedure), which sets out substantially revised guidelines for private letter ruling (PLR)...more

Skadden, Arps, Slate, Meagher & Flom LLP

Best Practices: How a Board Can Enhance Shareholder Value Creation in a Spin-Off

In an article last year, we discussed the increased pressure companies face to separate businesses that are not deemed “core,” and why tax-free spin-offs and similar transactions may be the most appealing way to achieve this....more

Jones Day

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

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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

Cadwalader, Wickersham & Taft LLP

IRS Hints at Revolution in Tax-Free Spin-Off Rules, Ruling Practice

Over the last three months, public statements by U.S. Treasury and Internal Revenue Service officials have suggested that they are in the process of significantly revising the rules governing tax-free spin-offs, split-offs...more

Skadden, Arps, Slate, Meagher & Flom LLP

IRS Expands Scope of Private Letter Ruling Program for Spin-Offs and Other Corporate Transactions

On January 2, 2024, the Internal Revenue Service (IRS) released two revenue procedures updating the IRS guidelines for private letter ruling (PLR) requests, Revenue Procedure 2024-1 and Revenue Procedure 2024-3 (the 2024...more

King & Spalding

Threading the Needle in “Tax-Free” Spinoffs

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With the rise in inflation and downturn in economies, spin-offs have become an increasingly popular method of unlocking shareholder value in a down market. Often, the ability to obtain tax-free treatment in the U.S. for the...more

Skadden, Arps, Slate, Meagher & Flom LLP

Putting the Best Spin on Corporate Splits

In recent years, in the boardrooms of public companies with multi-line businesses, there have been few louder drum beats than those from investors calling for divestitures, spin-offs or other separation transactions aimed at...more

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

Rivkin Radler LLP

Dividing the Multi-Family Corporation

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Sibling Rivalry- You have probably encountered family-owned corporations in which the founder’s offspring are involved in the business to varying degrees. They may even own some equity, typically having received such equity...more

Miller Nash LLP

Today in Tax: IRS Introduces Fast-Track Process for Obtaining Letter Rulings

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Corporate reorganizations and spin-off transactions are transactions where there is often a great deal of incentive to qualify for tax-free treatment. In many cases, the amount of tax at issue justifies obtaining a private...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

Skadden, Arps, Slate, Meagher & Flom LLP

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

If enacted in its present form, the Build Back Better Act (BBBA) would amend the U.S. tax code’s rules for tax-free spin-off and split-off transactions (spin-offs), imposing significant restrictions on a parent company’s...more

Miller Nash LLP

Today in Tax: Spin-off Structures in Mergers & Acquisitions

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Brief commentary on the past week’s cases, rulings, notices, and related federal tax guidance. Corporations Permitted to Rely on Public Shareholder Data to Confirm Qualification for Tax-Free Spin-off and Subsequent Merger...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

Skadden, Arps, Slate, Meagher & Flom LLP

SEC Adopts Changes to Financial Disclosure Requirements for Acquisitions and Dispositions

On May 21, 2020, the Securities and Exchange Commission (SEC) adopted extensive changes to the financial disclosure requirements for business acquisitions and dispositions. The amendments are intended to reduce the complexity...more

Wilson Sonsini Goodrich & Rosati

IRS Ruling May Further Signal a Relaxation of “Collection of Income” Prong of Tax-Free Spin-off Active Trade or Business Test

On February 28, 2020, the Internal Revenue Service (IRS) released private letter ruling 202009002 (the PLR), which concluded that an absence of income does not, under the facts of the PLR, prevent a line of business from...more

A&O Shearman

IRS Permits First Spin-off of R&D Intensive Business With No Pre Spin-off Income

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On February 28, 2020, the Internal Revenue Service (the “IRS”) released PLR 202009002, the first private letter ruling that will potentially permit a tax-free spin-off of a research and development (“R&D”) intensive business...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

Dechert LLP

2020 Global Private Equity Outlook

Dechert LLP on

Dechert and Mergermarket assess market trajectories - Growing concerns over geopolitics and fear of a looming recession are the top challenges facing the private equity industry, according to the latest Private Equity...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

Latham & Watkins LLP

Spin-offs Unraveled: Complex ‘IPOs’ With a Sophisticated Tax Overlay - Key Considerations When Spinning Off a Business Segment or...

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In a spin-off, a public company separates one or more of its businesses into new, publicly traded companies. For the public company that initiates it, a spin-off can achieve a number of critical business and financial...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

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