Bump-and-strip Technique

Bump-and-strip Technique means:
a method by which the basis of a second-tier subsidiary stock is stepped or bumped up upon distribution, thereby permitting a later tax-free stripping of funds without creating or increasing an excess loss account (ELA). Under Former Temporary Regulation (check here if this Temp. Reg. is current) §1.1502-l4T(c)(l), the amount of avoided ELA is recaptured.