13 January 2025 Proposed Regulations address nonrecognition treatment in corporate separations, incorporations and reorganizations — would establish multi-year filing requirement The IRS and Treasury Department on January 13, 2024, released proposed regulations (REG-112261-24) under IRC Sections 355, 357, 361 and 368 related to the nonrecognition of gain or loss on corporate separations, incorporations and reorganizations. The proposed regulations provide rules concerning distribution and retention of controlled corporation stock, assumption of liabilities by controlled corporations, exchange of property between distributing corporations and controlled corporations, and distributions and transfers of consideration to distributing corporation shareholders and creditors. In accompanying proposed regulations (REG-116085-23) under IRC Section 355, Treasury and the IRS would require multi-year reporting for corporate separations and related transactions to establish qualification for nonrecognition. Taxpayers would be required to provide relevant information on a new Draft Form 7216, Multi-Year Transaction Reporting. A Tax Alert is forthcoming.
Document ID: 2025-0221 | ||
