Corporate taxation nonliquidating distributions
General Rule in Nontaxable Liquidation of a Subsidiary 1. Tax Basis and Holding Period to Parent of Property Received in Liquidation of a Subsidiary A. Finally, the Portfolio reviews the issues arising from the liquidation of insolvent subsidiaries and the existence of intercorporate debt in subsidiary liquidations. Section 337 - Tax Consequences to Subsidiary (1) Subsidiary Not Taxable on Distributions to Parent with Respect to Stock (2) Subsidiary Not Taxable on Transfers in Satisfaction of Debt to Parent (3) Subsidiary Taxable on Certain Distributions to a Tax-Exempt Parent c. Basic Requirements of Nontaxable Subsidiary Liquidations A. Distribution Solely of Cash Qualifies as â€œPropertyâ€ E. Subsidiary Liquidations Not Qualifying Under § 332 A. Application of Collapsible Corporation Rules to Minority Shareholders 5. Tax Consequences to Liquidating Subsidiary of Distributions to Minority Shareholders 1. Prior Ownership of Target Stock by Acquirer - Elimination of the â€œBausch & Lombâ€ Rule 4.
The Portfolio highlights traps for unwary taxpayers and discusses planning opportunities in connection with a corporate liquidation. Liquidating Distribution to Preferred But Not to Common Stock - Spaulding Bakeries, Inc. Subsidiary Not Taxable if § 332 Applies to the Liquidation b. Tax Consequences to Parent on Liquidation of Insolvent Subsidiary a. Qualification of an Insolvent Subsidiary for a Nontaxable Liquidation D. Determining Whether a Taxable Liquidation Is Advantageous 2. Consequences Before Liquidation if Parent Acquires Debt from Unrelated Party c. Consequences to Subsidiary of Repayment of Debt to Parent a. Treatment Upon Liquidation of Subsidiary of Parent's Previously Capitalized Cost of Acquiring Subsidiary 6. Inclusion of Transitory Subsidiary in Consolidated Return 4. Qualification of an S Corporation as a Corporate Parent in a § 332 Liquidation 1.
Expenses of Subsidiary in Assisting or Resisting a Takeover Attempt a.