Understand the requirements of a tax-free spin-off and common pitfalls in tax-free spin-off structuring.

A spin-off of assets or stock by a corporation can incur significant corporate and stockholder-level tax if not properly structured. There are numerous and often esoteric requirements for a spin-off to qualify as a tax-free transaction for U.S. federal income tax purposes. This presentation will help tax advisors and in-house tax practitioners understand the reasons when to pursue a tax-free spin-off, the requirements of a tax-free spin-off and common pitfalls in tax-free spinoff structuring. This workshop will also discuss areas under current IRS study, recent revisions to the IRS private letter ruling policy, and alternative structures if a tax-free spin-off is not available. Finally, this discussion will discuss issues specifically impacting technology and life science companies.

Learning Objectives

• You will be able to describe the fundamental requirements of a tax-free spinoff.
• You will be able to discuss the tax considerations whether to pursue a tax-free spinoff or an alternative transaction.
• You will be able to explain when a tax-free spinoff makes sense.
• You will be able to understand recent changes to IRS private letter ruling policy.