The Situation: The IRS had discontinued issuing private rulings on certain transactions related to spin-offs, leaving companies to wonder if favorable tax treatment was likely.
The Action: Recent IRS guidance announced the resumption of private rulings in transactions under consideration, and provided confirmation that certain “north-south” transactions will not adversely impact second-step spin-offs.
Looking Ahead: Further clarification on these matters is necessary, and additional guidance on spin-offs may be in the offing.
The IRS recently provided taxpayers with favorable guidance involving tax-free spin-offs. First, the IRS will resume issuing private rulings that allow a distributing corporation to satisfy … Read more