Tax-Free Spinoffs Could Be Much Tougher Under Proposed New Rules

business-tax-[Converted]

 

Many U.S. companies take advantage of lower foreign taxes by creating tax-free spinoffs of their parent companies. It’s a great and legal way to lower their corporate tax bills. However, some lawmakers have long pressed for changes to these rules and it appears that changes could be coming.

The U.S. Treasury Department recently proposed some new rules that would make it more difficult for companies to create certain kinds for spinoffs. In order to avoid capital gains taxes on the transaction 5 percent of the amount of a spin-off must be an active trade or business.

The new proposed rules also aim to clear up the factors that determine when a spinoff cannot be used for distributing profits and earnings to shareholders. If the new rules pass, the transaction would be deemed a device if there was a large enough gap between the amount of the company that is made up of nonbusiness assets while the other company had a lot less.

At this point the new rules have only been proposed and they will not take effect unless the Treasury Department makes them official. Even at that time they still wouldn’t affect any transactions that were already planned before approval even if the transaction was finalized after.

http://www.wsj.com/articles/new-treasury-rules-would-make-it-harder-to-complete-tax-free-spinoffs-1468500481

Posted in

Top 8 Most Expensive Cars in 2016

Have your eye on a new set of wheels? If money is not really an issue then your choices are practically endless, as long as you can find the model you’re looking for available somewhere, as many of these cars are also extremely rare. However, if your search includes some of the worlds most exclusive…

Elon Musk

What Scares Elon Musk About Artificial Intelligence?

What Scares Elon Musk About Artificial Intelligence? As the world of technology continues to move into the furthest realms of the imagination, new ideas, services and products continue to push the boundaries of what’s possible. With virtual reality and now artificial intelligence gaining more steam, these kinds of technologies also create moral dilemmas for many…

Top 5 Must Have Social Media Apps Released in 2016

Top 5 Must Have Social Media Apps Released in 2016

Top 5 Must Have Social Media Apps Released in 2016 We’re all on it. Checking our phones for Facebook notifications, WhatsApp messages, or sending Snapchat pictures. Whatever your preferred platform may be, it’s safe to say that social media seems to take up a big part of our lives, being accessible now more than ever.…

The Brains Behind Udacity’s Self Driving Car Degree

The Brains Behind Udacity’s Self Driving Car Degree

The Brains Behind Udacity’s Self Driving Car Degree Most anyone with a degree in a technology field will tell you that it was well worth his or her time, money and effort to earn it. However, with advancements in technology moving so quickly certain degrees can be more valuable, while other degrees can become outdated…