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M&A Activity Hit by Broader Final Rules on Gap-Year Transactions

Aug. 26, 2020, 8:46 AM

Companies seeking to engage in reorganization may now have more complexity to consider after the Treasury Department expanded an anti-abuse rule aimed at a gap period between tax guidance.

Under final rules (T.D. 9909; RIN: 1545-BP35) for the Section 245A dividends-received deduction, acquiring assets, such as intellectual property, between Jan. 1 and Nov. 30, 2018, generates income that is ineligible for the full deduction.

The Aug. 21 rules are an expansion of the anti-abuse effort Treasury imposed in 2019 temporary rules (T.D. 9865) as it sought to block companies from taking advantage...

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