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Examples of reorganizations that may be tax free include mergers, liquidations of subsidiaries, share for share exchanges, exchanges of shares for assets, changes in form or place of organization, and recapitalizations. [60] Advance tax planning might mitigate tax risks resulting from a business reorganization or potentially enhance tax savings ...
A liquidating distribution (or liquidating dividend) is a type of nondividend distribution made by a corporation or a partnership to its shareholders during its partial or complete liquidation. [1] Liquidating distributions are not paid solely out of the profits of the corporation. Instead, the entire amount of shareholders' equity is ...
A Reverse Morris Trust is used when a parent company has a subsidiary (sub-company) that it wants to sell in a tax-efficient manner. The parent company completes a spin-off of a subsidiary to the parent company's shareholders. Under Internal Revenue Code section 355, this could be tax-free if certain criteria are met. The former subsidiary (now ...
An unlimited company or private unlimited company is a hybrid company (corporation) incorporated with or without a share capital (and similar to its limited company counterpart) but where the legal liability of the members or shareholders is not limited: that is, its members or shareholders have a joint and several non-limited obligation to meet any insufficiency in the assets of the company ...
Its Irish subsidiary, Janssen Pharmaceuticals Inc., paid for Synthes with J&J's untaxed foreign cash holdings. Then, by transferring Synthes into another of J&J's foreign subsidiaries and dissolving Synthes before the end of the quarter, the pharmaceutical giant escaped the tax hit, according to a person familiar with the deal."
After the election is made, the subsidiary corporation is not treated as a separate corporation for tax purposes, and all "assets, liabilities, and items of income, deduction, and credit" of the QSub are treated belonging to the parent S corporation. [10] Spouses (and their estates) are automatically treated as a single shareholder. [11]
A number of U.S. Tax Court cases involving Family Limited Partnerships (FLPs) illustrate the IRS's use of veil-piercing arguments. [50] Since owners of U.S. business entities created for asset protection and estate purposes often fail to maintain proper corporate compliance, the IRS has achieved multiple high-profile court victories. [51] [52]
Tax; Financial institution; ... Business operations; International business; ... A keepwell agreement is a contract that a parent company will keep a subsidiary ...