In a variety of circumstances management of a corporation may have good business reasons for dividing the corporation into two or more corporations in such a manner that shareholders in the original corporation own stock in each of the resulting entities. This may mean that assets must be moved from one corporate shell to another and stock must be distributed to the shareholders. Thus, under the general rules of taxation, the original corporation and their shareholders would realize taxable income. However, under certain conditions the realized gains are not taxed at the time of the distribution or exchange.
This book discusses the reasons the Internal Revenue Code provisions governing corporate division were first added to law, how the ...
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