16 December 2016 IRS issues temporary regulations under Section 355(e) and (f) limiting tax-free treatment of certain transactions On December 16, 2016, the Treasury Department and the IRS issued temporary regulations (T.D. 9805) expanding the definition of a "predecessor" and "successor" corporation under Section 355(e)(4)(d), which limits the corporate tax-free treatment of spin-offs that are part of the same plan as certain acquisitions. In addition to adding clarity to this area of the tax law, the temporary regulations may make it more likely that a divisive transaction could be taxable at the distributing corporation level. The regulations are generally effective as of December 19, 2016, and apply to distributions made after January 18, 2017, with limited exceptions for distributions made under a binding agreement, described in a previously submitted private letter ruling request, or described in a public announcement or SEC filing made before December 16, 2016. A Tax Alert on the regulations is forthcoming. Document ID: 2016-9015 |
