IRS PLR: Corporate Split-Offs Will Qualify as Reorganizations for No Gain or Loss Recognition, Other Related Aspects (IRC §368)

The IRS issued 21 rulings on a series of transactions in a corporate reorganization in which “Distributing” plans to contribute business assets to two newly formed controlled entities and distribute Controlled 1 and 2 stock to certain shareholders in exchange for Distributing stock, all three entities then entering into an agreement to periodically rent specified properties for fair market value at arm’s length. Rulings (1), (11) Controlled 1 and Controlled 2 contributions followed by respective split-offs each will be a “reorganization” under tax code Section 368(a)(1)(D) and each involved party a “party to a reorganization” under Section 368(b) ...