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

The IRS issued 10 rulings on a corporate reorganization entailing (among other steps) “Distributing’s” formation of a controlled corporation with which business will be aligned separately from Distributing Group, contribution of subsidiary stock to Controlled in exchange for stock thereof, transfer of Controlled stock to a bank in retirement of debt, and distribution of Controlled stock to Distributing shareholders. (Ruling 1) The contribution and distribution will be a “reorganization” within the meaning of tax code Section 368(a)(1)(D), with Distributing and Controlled each a “party to a reorganization” within the meaning of Section 368(b). The contribution, debt ...