“D” Reorganization
“D” reorganization: “Spin-off” and “Split-off”
acquisitive d reorganization “D” Reorganization
Explanation:
* Corporate T contains the assets of former corporation A and of T.
* Corporation A goes out of existence Corporation A’s shareholder’s control Corporation T.
Requirements for Divisive “D” d reorganization requirements imposed by IRC §355
* Distribution of Control -by the original corporation to its shareholders
* Character of Distribution – stock or securities of the newly created subsidiary.
* Active Business Immediately -original corporation and the controlled subsidiary.
* Not as Tax Avoidance Device.
Spin-Off (Divisive I’D” type d reorganization)
Explanation:
A spin-off is the same as a split-off (see Exhibit 7-10), except that A’s shareholders receive shares of B stock, but do not turn in any of their shares of A stock. The spin-off transaction is often used when management decides that corporate operations should be divided but the shareholders want to continue investment in both the original and new corporation.
Split-Off (Divisive ” D” Reorganization)
When shareholders prefer different investments in the future operations of the corporation, a split-off is used. In a split-off, the original corporation transfers some of its assets to a newly formed subsidiary in exchange for all of the subsidiary’s stock, which it then distributes to some or all of its shareholders in exchange for some portion of their original stock. As a result, the two corporations are held by the original shareholders but in a proportion that differs from that which they held in the original corporation.
Explanation:
* A Corporation transfers part of its assets to B Corporation in exchange for B corporation stock.
* A’s shareholders exchange part of their A stock for B stock.
Split-up (Divisive “D” divisive d reorganization)
Explanation:
* A Corporation transfers all of the bassets to B and C Corporations in exchange for all of the stock of B and C.
* A Corporation then exchanges all of the B and C stock for its own stock and a dissolves.
* After the reorganization, A no longer exists, and A’s shareholders are now the shareholders of B and C Corporations.
Proceed to “EFG” Reorganization
To receive our free newsletter, contact us here.
Subscribe our YouTube Channel for more updates.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
GROCO.com is a proud sponsor of The American Dreams Show.
The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.
Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.
The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.
They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..
American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:
Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…
MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness. It’s mission statement:
In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.
Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.
Request Telephone Tax Refund By Amending Your Return
Request Telephone Tax Refund By Amending Your Return Maybe you filed your federal tax return, received a refund and even spent the last penny before realizing that you missed out on a one time opportunity to request the Telephone Excise Tax Refund! Luckily, some opportunities do call twice. You can still request the telephone tax…
Tax Saving Strategies For Business Owners
[vc_row][vc_column][vc_column_text] Tax Saving Strategies For Business Owners 1. Did you know you can use your previously funded IRA to fund the current year’s deductible contributions? Well, you can. If you don’t have enough cash to make a deductible contribution to your IRA by April 15th, here is how you can still take the tax deduction.…
Credit Default Swaps – Impose A Tax On Bogus Insurance
[vc_row][vc_column][vc_column_text] Credit Default Swaps – Impose A Tax On Bogus Insurance By Ron Cohen, CPA, MST Partner Greenstein, Rogoff, Olsen & Co., LLP Proposal to amend the U.S. Internal Revenue Code: Any Seller, Buyer or Insured Party who enters into a Credit Default Swap (“CDS”) contract insuring U.S. source risks will be subject to an excise…
Income Tax Deferral Strategies for Real Estate Investors
Income Tax Deferral Strategies for Real Estate Investors There are a number of significant income tax benefits that are often overlooked by real estate investors that could allow them to defer or exclude some or all of their income tax liabilities on the sale or disposition of their real estate tax deferral assets. It is…