Revised Temp. Regs. may ease anti-Morris Trust rule effects

The IRS issued revised Temp. Regs. Sec. 1.355-7T, effective for distributions after April 26, 2002. In Aug. 2001, the IRS issued temporary regulations that contained a number of safe harbors that planners could use to avoid triggering gain recognition under Sec. 355(e). The Temp. Regs. Sec. 1.355-7T...

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Bibliographic Details
Published inThe Tax Adviser Vol. 33; no. 9; p. 560
Main Author Hetzer, B. Todd
Format Magazine Article Trade Publication Article
LanguageEnglish
Published New York American Institute of CPA's 01.09.2002
American Institute of Certified Public Accountants
Subjects
Acquisitions and mergers
Agreements
Alliances
Business purpose doctrine
Corporate divestiture
Corporations
Gain recognition
Harbors
Ownership changes
Safe harbor
Stockholders
Taxation
Temp. Reg. 1.355-7T
Temporary tax regulations
United States
United States > US
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Summary:The IRS issued revised Temp. Regs. Sec. 1.355-7T, effective for distributions after April 26, 2002. In Aug. 2001, the IRS issued temporary regulations that contained a number of safe harbors that planners could use to avoid triggering gain recognition under Sec. 355(e). The Temp. Regs. Sec. 1.355-7T delete the provision in the 2001 proposed regulations that a business purpose would exist if within 6 months after the distribution, an acquisition occurred, or an agreement, understanding, arrangement or substantial negotiations existed. The changes to the revised temporary regulations, particularly the safe harbors, are more favorable for planning purposes than the prior temporary regulations.
ISSN:0039-9957