Gain deferrals and LBOs are only two areas where tax planning is affected by Code changes
Article Abstract:
The repeal of the General Utilities doctrine and the passage of TAMRA restricted the use of tax deferrals consequent to mergers and acquisitions (M&A). The Revenue Reconciliation Act (RRA) of 1989 has certain provisions that impact on M&A by restricting two deferral techniques, securities received in exchange and the consolidated return approach. RRA 89 repeals the tax-free treatment of long-term securities received in the exchange: the transaction is treated as a taxable sale. For consolidated returns, RRA 89 makes gains attributable to an excess loss account in the dispositions of subsidiary stock recognized, non-deferrable gains. RRA 89 also restricts deductions for the interest from high yield bonds, limits earnings stripping payments, and discourages the carry-back of net operating losses created from interest expenses associated with leveraged buyouts by denying interest deductions over certain levels.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1990
User Contributions:
Comment about this article or add new information about this topic:
Guidelines for avoiding publicly traded partnership status issued by the IRS
Article Abstract:
The Revenue Act of 1987 classifies most publicly traded partnerships (PTPs) as corporations for tax purposes. Notice 88-75 suggests several limited 'safe harbors' whereby partnership interests may avoid PTP status. These 'safe harbors,' along with such relevant considerations as redemption and repurchase agreements, the special computational rule, and the transitional rule, are discussed and illustrated.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1988
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Cultural differences and shareholder value in related mergers: linking equity and human capital. Types of synergy and economic value: the impact of acquisitions on merging and rival firms
- Abstracts: A note on the financial variable and ratio structure of New Zealand listed companies. Assessing the accuracy of financial analyst security return predictions
- Abstracts: The pricing of futures and options contracts on the value line index. The intertemporal relation between the U.S. and Japanese stock markets
- Abstracts: Options can defer income recognition and convert interest into capital gains. Requirements to obtain the lower head of household rates eased in several areas
- Abstracts: When will tax-exempts bar interest deductible on loans? Guidelines for allocating interest expense provided in new temporary regulations