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Corporate reorganization

Final regs cover nonrecognition transfers of loss property to corporations

Final regs cover nonrecognition transfers of loss property to corporations

T.D. 9759, 03/25/2016; Reg. § 1.332-6, Reg. § 1.332-7, Reg. § 1.334-1, Reg. § 1.337-1, Reg. § 1.351-3, Reg. § 1.358-6, Reg. § 1.362-3, Reg. § 1.362-4, Reg. § 1.368-3 IRS has issued final regs on the Code Sec. 334(b)(1)(B) and Code Sec. 362(e)(1) anti-loss importation provisions that are designed to prevent erosion of the […]

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Parent’s worthless stock deduction for sub determined under look-through approach

Parent’s worthless stock deduction for sub determined under look-through approach

PLR 201610004 IRS has privately ruled, for purposes of the Code Sec. 165(g)(3) gross receipts test, that a holding company will include in its aggregate gross receipts all amounts of gross receipts received in certain intercompany transactions. IRS further held that such amounts from the intercompany transactions will be treated as “gross receipts from passive […]

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Tax Court applies Code Sec. 356(c) to determine gain and loss in merger transaction

Tax Court applies Code Sec. 356(c) to determine gain and loss in merger transaction

Tseytin, TC Memo 2015-247 The Tax Court has concluded that a shareholder, who purchased a block of stock from another shareholder to effectuate a corporate merger, should be treated as the owner of that block of stock and not merely as an agent or nominee who held the stock for another. Further, in determining the […]

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Healthcare M&A will wear down in 2016

Healthcare M&A will wear down in 2016

NEW YORK (Reuters Breakingviews) – Healthcare M&A will soon be wearing down. The industry’s $550 billion of deals last year is three times more than the previous annual record, according to Thomson Reuters data. Anything close to that sum will prove challenging to repeat. There are several reasons to expect a reversion to the dealmaking […]

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IRS rules on gross receipts test for treatment of affiliated subsidiary’s worthless stock

IRS rules on gross receipts test for treatment of affiliated subsidiary’s worthless stock

  PLR 201548003 In a private letter ruling (PLR), IRS has ruled that the common parent of an affiliated group of corporations can claim a worthless stock deduction on its wholly-owned subsidiary’s liquidation or conversion to a disregarded entity for federal income tax purposes. For purposes of the Code Sec. 165(g)(3)(B) gross receipts test, the […]

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Final F reorganization regs cover qualifications & outbound transactions

Final F reorganization regs cover qualifications & outbound transactions

T.D. 9739, 09/18/2013, Reg. § 1.367(a)-1, Reg. § 1.367(a)-1T, Reg. § 1.368-2 IRS has issued final regs that provide guidance on the qualification for a corporate reorganization under Code Sec. 368(a)(1)(F) (F reorganization, i.e., a mere change of identity, form, or place of organization of one corporation). IRS has also issued final regs under Code […]

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Final F reorganization regs cover qualifications & outbound transactions

Final F reorganization regs cover qualifications & outbound transactions

T.D. 9739, 09/18/2013, Reg. § 1.367(a)-1, Reg. § 1.367(a)-1T, Reg. § 1.368-2 IRS has issued final regs that provide guidance on the qualification for a corporate reorganization under Code Sec. 368(a)(1)(F) (F reorganization, i.e., a mere change of identity, form, or place of organization of one corporation). IRS has also issued final regs under Code […]

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Acquisition of partnership interest was expansion of distributing corporation’s business

Acquisition of partnership interest was expansion of distributing corporation’s business

PLR 201528016 IRS has privately ruled that a distributing corporation’s acquisition of a business segment through its acquisition of an interest in a partnership constituted an expansion of the distributing corporation’s business under Reg. § 1.355-3(b)(3)(ii), and not an acquisition of a new or different business. Background. Under Code Sec. 355(a), a corporation may distribute stock […]

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Correction narrows scope of recently-issued regs that close corporate partner loophole

Correction narrows scope of recently-issued regs that close corporate partner loophole

IRS has corrected temporary regs that were issued June 12, 2015, that prevent a corporate partner from avoiding corporate-level gain through transactions with a partnership involving equity interests of the partner. The correction somewhat narrows the scope of the regs.  Click here for TD 9722, Partnership Transactions Involving Equity Interests of a Partner, as corrected. […]

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Corporation failed to meet requirements of “Type G” reorganization

Corporation failed to meet requirements of “Type G” reorganization

Chief Counsel Advice 201523001 In Chief Counsel Advice (CCA), IRS concluded that a debtor corporation failed to qualify for a tax-free reorganization under Code Sec. 368(a)(1)(G), i.e., a “Type G” reorganization in which the corporation transfers assets in a bankruptcy case or similar insolvency proceeding under a court-approved reorganization plan. Background. In order to facilitate […]

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Final regs clarify basis allocation in “all cash” D reorganizations

Final regs clarify basis allocation in “all cash” D reorganizations

T.D. 9702, 11/10/2014; Reg. § 1.358-2 IRS has issued final regs on the allocation of basis in all cash D reorganizations where no stock or securities of the issuing corporation are issued and distributed in the transaction. The final regs clarify that, in such transactions, only shareholders that own actual shares in the issuing corporation […]

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Delphi to contest pressure to file U.S. taxes despite UK tax base

Delphi to contest pressure to file U.S. taxes despite UK tax base

(Reuters) – Auto parts supplier Delphi Automotive Plc said it would “vigorously contest” pressure by U.S. tax authorities to file taxes in the United States as a domestic company, when its tax base is in the UK. Delphi, which operates out of Detroit, is one among several American companies locked in a battle with the […]

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Proposed regs issued on carryover of tax attribute in corporate acquisitions

Proposed regs issued on carryover of tax attribute in corporate acquisitions

In Prop Reg § 1.381(a)-1, IRS has issued proposed regs that would modify the definition of an acquiring corporation for purposes of Code Sec. 381 for certain asset acquisitions. The proposed regs, which would complement proposed Code Sec. 312 regs dealing with earnings and profits (E&P), would provide that the direct acquiring corporation would succeed […]

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Individual received income from merger-triggered stock sale before her death

Individual received income from merger-triggered stock sale before her death

In Santangelo v. U.S., (DC MS 03/19/2014) 113 AFTR 2d ¶ 2014-649, a district court has held that an individual was in constructive receipt of income from a stock sale triggered by a merger in 2006 even though neither she nor her daughter, who held a power of attorney, attempted to access the funds before […]

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Spin-off to separate two lines of business qualifies as D reorganization

Spin-off to separate two lines of business qualifies as D reorganization

In a private letter ruling (PLR), PLR 201338040, IRS has concluded that a series of proposed transactions to be entered into by a parent corporation and members of its affiliated group, in order to spin off a line of business to a newly formed controlled corporation, will generally qualify for tax-free treatment under Code Sec. […]

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Chief Counsel Advice upholds tax-free treatment of affiliated group’s restructuring transactions

Chief Counsel Advice upholds tax-free treatment of affiliated group’s restructuring transactions

In Chief Counsel Advice (CCA) 201340016, IRS has determined that several transactions entered into by members of an affiliated group to restructure ownership of its operations and financing activities should be considered separately, rather than stepped together, and that each qualifies for nonrecognition treatment. The CCA found that the transactions were supported by valid business […]

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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