IRS PLR: Spin-Off Qualifies as Tax-Free Reorganization (IRC §368)

IRS issued 17 rulings regarding the proposed public spin-off of Distributing’s Controlled business. (1) The transaction qualifies as a “D” reorganization where Distributing and Controlled are parties to the reorganization. (2), (3), (6), (7) No gain or loss is recognized by either Distributing or Controlled, and to shareholders. (4), (8) Carryover basis rules applies. (5), (9) Holding periods carryover rules apply. (10) Distributing’s public shareholders will treat cash in lieu of fractional shares as if the fractional shares had been distributed to such shareholders as part of the Public Spin-off and then had been disposed of by such shareholders for ...