Corporate Taxes, Spinoffs, Subsidiaries

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

Wilson Sonsini Goodrich & Rosati on 12/7/2022

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

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

Skadden, Arps, Slate, Meagher & Flom LLP on 2/7/2022

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

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

Cadwalader, Wickersham & Taft LLP on 11/11/2021

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

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

Smith Anderson on 1/28/2019

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

IRS Resumes Issuing Transactional Spin-Off Rulings

Proskauer - Tax Talks on 9/25/2017

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

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

Pillsbury Winthrop Shaw Pittman LLP on 7/15/2016

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

"Extenders Bill Makes Important REIT Reforms and Closes Door on REIT Spinoffs"

Skadden, Arps, Slate, Meagher & Flom LLP on 12/21/2015

President Obama signed into law a bill that will significantly reform the taxation of real estate investment trusts (REITs). Most notably, the Protecting Americans from Tax Hikes Act of 2015 (the Bill) prevents companies from...more

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