Federal Tax

Corporate Acquisitions — D Reorganizations (Portfolio 772)

  • The Portfolio, Corporate Acquisitions-D Reorganizations describes the various aspects of the two basic types of transactions that qualify as reorganizations under §368(a)(1)(D) (“D reorganizations”).

Description

Bloomberg Tax Portfolio, Corporate Acquisitions — D Reorganizations, No. 772, describes the various aspects of the two basic types of transactions that qualify as reorganizations under §368(a)(1)(D) (“D reorganizations”).

The first type of D reorganization is a transfer by a corporation of substantially all of its assets to a controlled corporation followed by the complete liquidation of the transferor corporation. This type of transaction is frequently referred to as an acquisitive D reorganization.

The second type of D reorganization is a transfer by a corporation of a part of its assets to a controlled corporation, followed by a distribution of the controlled corporation’s stock pursuant to §355. This type of transaction is frequently referred to as a divisive D reorganization. Divisive D reorganizations include “spin-offs,” “split-offs,” and “split-ups.”

This Portfolio focuses primarily on acquisitive D reorganizations, although it also addresses the basic requirements and consequences of divisive D reorganizations. Specifically, this Portfolio explains: (1) the types of asset transfers that may be treated as acquisitive D reorganizations (by either the taxpayer or the IRS); (2) the requirements of a D reorganization; and (3) the tax treatment of parties to a D reorganization.

For a discussion of divisive D reorganizations, see 776 T.M., Corporate Separations. For discussion of other types of reorganizations, see the Portfolios listed under “Business Entities: C Corporations” in the Tax Management U.S. Income Series Classification Guide.

Table of Contents

I. Introduction
II. Control of the Acquiring Corporation
III. Transfer of Assets
IV. Distribution Requirement
V. Plan of Reorganization
VI. Business Purpose Doctrine
VII. Continuity of Business Enterprise
VIII. Continuity of Interest
XI. Comparison with Other Reorganizations
XII. Relationship to Section 351
XIII. Sale of Stock to Related Corporation
XIV. Combining Divisive and Acquisitive Reorganizations
XV. Tax Treatment of a D Reorganization
XVI. Carryover of Tax Attributes
XVII. Investment Tax Credit Recapture
XVIII. Section 306 Stock
XIX. Small Business Corporations
XX. Foreign Transactions
XXI. Ruling Requests
XXII. Reporting Requirements

ridgway-candace-2015
Candace A. Ridgway
Partner
Jones Day
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