A couple of months back, a local business reporter asked whether I could identify one kind of corporate transaction that was occupying more of my time than any other. When I asked whether they were referring to any specific industry, form of M&A transaction,[i] or type of buyer,[ii] they replied that they were
Section 368(a)(1)(D)
Spin-Offs, Mergers, and . . . Gifts? Oh My
Mostly Divisions
Over the last several months, many of the projects on which I have been working have involved the division of a corporation or of a partnership. Yes, there have been purchases and sales of businesses along the way. And, yes, there have been restructurings of organizations for various purposes, including to facilitate a…
Tax-Free Spin-Off? That May Depend . . . On Post-Spin-Off Events
The Break-Up
After a tense period of disagreement and stalemate, the threat of litigation,[i] the ensuing economic and emotional stress, Client and their former fellow-shareholder (“Departing”) – and onetime friend, before their disagreement on the direction of the business turned into much worse – have gone their separate ways. The corporation (“Corp”)[ii] through…
Corporate Spin-Offs: The “Active Trade or Business” And The Collection of Income
Keep On Reading
Over the last few months, we’ve been working on a number of transactions that involve the division of a closely held corporation or partnership.
In each instance, the impetus for the division has been the desire of the business entity’s owners to go their separate ways so as to enable them to…
“Business Purpose” and Dividing the Family Corporation: Think Before You Let it Rip
Sibling Rivalry
Many of us encounter family-owned corporations in which the founder’s children are engaged in the business to varying degrees. They may even own shares in the corporation, typically having received them as gifts from their parents.[i] These situations may develop in such a way that they present difficult succession planning considerations for…