When A Simple Spinoff Is Not Simple

Law360, New York (April 2, 2015, 2:32 PM EDT) -- A recent letter ruling is one of the few “significant issue” rulings issued by the IRS Office of Chief Counsel (Corporate) after it stopped ruling generally on most nonrecognition transactions in Subchapter C. It should have been simple, as spinoffs go, because it was all domestic and involved a pro rata spinoff to public shareholders, where the possibility of “device” is almost nonexistent. And yet, getting to “yes” required a lot of tax engineering.

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