IRS PLR: Corporate Income Tax Consequences of Reorganization (IRC §355)

The IRS has published a supplemental private letter ruling on Section 355 concerning a series of corporate transactions and determining that the prior letter ruling remains in full force and effect, except as modified. The prior letter ruling was modified in determining: 1) the aggregate basis of the distributing common stock and the controlled common stock in the hands of the holders of distributing common stock immediately after the distribution; 2) the holding period of the controlled common stock received by the distributing shareholders in the distribution; and 3) that the receipt by distributing’s shareholders of cash in lieu of ...