The article reports on new tax-free spin-off rules released by the U.S. Internal Revenue Service (IRS). The proposed rules explain the active trade or business requirements for a Code Sec. 355 tax-free spin-off. The new rules also address whether a corporation is engaged in a trade or...
Understand the requirements of a tax-free spin-off and common pitfalls in tax-free spin-off structuring.A spin-off of assets or stock by a corporation can incur significant corporate and stockholder-level tax if not properly structured.
A tax-free spinoff refers to a corporate action in which a publicly traded company spins off one of its business units as an entirely new company without tax implications. This type of transaction is deemed to be "tax-free" because the parent company is still able to divest the business i...
1. Establish governance with clearly defined roles. Define spin-off game plan, form transaction team and communicate objectives to kick off the new transaction efficiently and avoid a slow start. 2. Develop timeline and key milestones to manage successful separation execution. Define the separation t...
Spin-sanity: can't sell that ill-fitting subsidiary or launch an IPO? The old tax-free spin-off may still be a good bet - New Deals This study examines the effects of the qualification requirements for tax-free treatment in Japanese taxation on the corporate spin-off. The new taxation s...
“divisive” reorganizations in which the Parent contributes the spin-off business to a newly formed subsidiary (Spinco) and then distributes the Spinco’s stock to the Parent’s shareholders. If the spin-off satisfies certain tax-free qualification requirements, the transaction is not taxab...
For each component of the RMT to be treated as tax-free, the RMT must comply with numerous technical requirements of both spin-offs under IRC section 355 and tax-free reorganizations under IRC section 368. Following the execution of an RMT transaction, the relevant stakeholders will continue ...
Digital platforms beware: new reporting requirements from the European Union. The European Council adopted the directive on the extension of the automatic exchange of information rules to digital platform operators (DAC7) On March 22, 2021, the European Council adopted the amendment to the Directive...
Impose additional requirements on claiming tax-free treatment for spin-offs and split-offs. Implement aspects of Pillar Two of the Organization for Economic Cooperation and Development (OECD) framework. Impose a minimum tax on individuals with a net worth over $100 million. ...
The bad news is that I don’t think either of these requirements will be met. And this is why I am more focused on supporting the flat tax. After all, the worst thing that happens with a flat tax is that future politicians reinstate the current system. But the worst thing that happens...