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Corporate Taxes Tax-Free Spin-Offs Spinoffs

McDermott Will & Emery

Protecting Employees’ Tax Position After a Spin-off

McDermott Will & Emery on

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

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

Miller Nash LLP

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

Miller Nash LLP on

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

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

A&O Shearman

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

A&O Shearman on

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

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

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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