Examples of Section 355 Transactions
Below are examples of corporate divisions and the analyses required to determine their tax consequences. The examples are intended to serve as a review of the earlier materials.
Spin-Off Followed by B Reorganization and Loss of Control
Corporation X had been engaged in the active conduct of two businesses (toy manufacturing and hand tool manufacturing) for over 5 years. Corporation Z, an unrelated corporation, desired to acquire the stock of X but was only interested in having X conduct the hand tool manufacturing business. This was accomplished pursuant to a plan under which X transferred its toy manufacturing business to a newly created corporation, Y, in exchange for all of the stock of Y, which ...
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