Divisive Reorganization

Divisive Reorganization

Divisive Reorganization means:
the transfer of all or part of a division, a subsidiary, or a corporate segment in a tax-free manner. There are three types of divisive reorganizations in which all or part of the assets are transferred to one or more controlled corporations: split-up, split-off, and spin-off. If a transaction falls within the divisive reorganization provisions, no gain or loss is recognized to a shareholder who receives only stock or securities (i.e., receives no boot). However, a gain is recognized to the extent that shareholders receive boot (money or property other than stock or securities). See also D-type reorganization. Former IRC (check if this IRC provision is current here) §355.


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