IRS PLR: Corporate Reorganization Transaction Rulings Issued (§368)

Distributing and Controlled will each be a “party to a reorganization” within the meaning of I.R.C. §368(b), the IRS ruled, finding that neither party will recognize gain or loss on the contribution or distribution. Controlled’s holding period in each asset received in the Contribution will include the period during which Distributing held the asset. Sub 3 will not recognize gain or loss (and no amount will be includible in income) upon the receipt of Controlled stock in the Distribution. The aggregate basis of the Distributing stock and Controlled stock in the hands of Sub 3 immediately after the Distribution will ...