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
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
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
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
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
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
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