IRS PLR: S Corporation Reorganization Authorized (IRC §368)

The IRS has issued a private letter ruling on Sections 368(a)(1)(D) and 355(a) of the Internal revenue Code concluding that the proposed transaction will qualify as a corporate reorganization, with Distributing causing the termination of Controlled’s QSub election as Controlled will cease to be a wholly owned subsidiary of a subchapter S corporation. Controlled must timely file Form 2553 to be treated as a subchapter S corporation effective as of the date of the Distribution. [PLR 202548010]

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