currentdevelopmentsincorporatetaxation

currentdevelopmentsincorporatetaxation内容摘要：

s. Reg. 167。 (d)(2)(iv), relating to the nature and use of assets)。 – In certain situations, distributing or controlled owning a small amount of Qualifying Business Assets in relation to all of its assets。 and – A prompt or planned RIC or REIT election by distributing or controlled. • Treasury and the IRS also believe that such characteristics may make it less likely that a distribution will satisfy the section 355 business purpose requirement or will qualify as a strong corporate business purpose constituting a nondevice factor. 14 Notice 202059 amp。 Rev. Proc. 202043 – Exception for Certain IntraGroup Distributions • Treasury and the IRS are more concerned with transactions in which stock of controlled is distributed outside an affiliated group (as defined in section 243(b)(2)(A)), including a distribution that is part of a series of related transactions in which controlled stock (including, for example, a controlled corporation that was a distributing corporation with respect to a lowertier distribution) is distributed outside an affiliated group. • The IRS will continue to follow its current ruling practice with respect to distributions within affiliated groups if there is no plan or intention for stock of any corporation to be distributed outside the affiliated group in a distribution described in the transactions identified in Rev. Proc. 202043. 15 Notice 202059 amp。 Rev. Proc. 202043 – Request for Comments • Treasury and the IRS requested ments on the following: – The facts and circumstances relevant to whether the transactions satisfy the requirements of section 355 and/or circumvent the purposes of General Utilities repeal。 – Whether Investment Assets are the appropriate assets to consider in addressing the concerns raised by the transactions。 – Whether the treatment of transactions solely within an affiliated group should differ from the treatment of transactions in which stock of one or more corporations will be distributed outside the affiliated group。 – Whether the IRS should rule on issues presented in distributions in which distributing or controlled owns a relatively small amount of Qualifying Business Assets, and if so in what circumstances。 and – Whether other classes of transactions should be excepted from the norule areas identified Rev. Proc. 202043. 16 Example – Active Trade or Business Issue Facts: D owns a 10percent interest in X, a publicly traded corporation. To facilitate a distribution of its interest in X to its shareholders that qualifies under section 355, D contributes its stock in X to newly formed C along with a small historic D business. The value of D’s stock interest in X is $99 and the value of the contributed D business is $1. •Does C satisfy the section 355(b) active trade or business requirement? •See section 355(a)(1)(B) and Treas. Reg. 167。 (d) (device test)。 see also section 355(g) (cashrich splitoffs). D C stock C (2) Shareholders X Public 10% X stock ($99 FMV ) + D Business ($1 FMV) (1) 17 Notice 202059 – Nature of Assets of Distributing and Controlled • Treasury and the IRS are most concerned about transactions that result in: – Distributing or controlled owning a substantial amount of cash, portfolio stock or securities, or other Investment Assets, in relation to the value of all of its assets and its Qualifying Business Assets。 and – One of the corporations having a significantly higher ratio of Investment Assets to NonInvestment Assets than the other corporation. 18 Rev. Proc. 202043 – Investment Assets NoRule • The following area is under IRS study and letter rulings will no longer be issued pending the issuance of formal guidance: – Any issue relating to the qualification, under section 355 and related provisions, of a distribution, or another distribution that is part of the same plan or series of related transactions, if, immediately after any such distribution, all of the following conditions exist: • The FMV of the Investment Assets of distributing or controlled is twothirds or more of the total FMV of its gross assets。 • The FMV of the gross assets of the trade(s) or business(es) on which distributing or controlled relies to satisfy the section 355(b) active trade or business requirement is less than 10 percent of the FMV of its Investment Assets。 and • The ratio of the FMV of the Investment Assets to the FMV of the assets other than Investment Assets of distributing or controlled is three times or more of such ratio for the other corporation (., controlled or distributing, respectively). • For purposes of the above FMV determinations, all members of the corporation39。 s SAG are treated as one corporation. • If distributing or controlled relies on an active trade or business of a partnership for section 355(b) purposes, then, in determining the FMV of the gross assets of the trade(s) or business(es) on which distributing or controlled relies to satisfy the section 355(b) active trade or business requirement, such corporation is treated as owning its ratable share of the partnership’s gross assets. 19 Definition of Investment Assets •The meaning of “Investment Assets” is the same as under section 355(g)(2)(B) with the following modifications: – In the case of stock or securities in a corporation any stock of which is publicly traded, section 355(g)(2)(B)(iv) is applied by substituting “50percent” for “20percent。 ” – An interest in a publicly traded partnership (as defined in section 7704(b), regardless of whether the partnership is treated as a corporation pursuant to section 7704(a)) is generally treated in the same manner as publicly traded stock。 – An interest in a partnership that is not a publicly traded partnership is generally treated in the same manner as stock that is not publicly traded stock。 and – The precedin。