The many guises of preferred stock

Article Abstract:

Taxation of preferred stock needs to be clarified. Preferred stock can be similar to debt although the corporate laws of states make a distinction between debt and equity. State distinctions do not fully justify taxation of preferred stock as equity, however. Regardless of whether preferred stock is considered debt or equity for tax purposes, redemptions or sales of preferred stock should be treated as dividends with original issue discount.

Securities, Preferred stocks, Securities taxes

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Settling for second best: synthetic reorganizations and spin-offs

Article Abstract:

The definition of tax-free reorganizations may include so-called synthetic reorganizations and spin-offs. Examples of these transaction include the TCI-Liberty model, the 1996 Viacom split-off deal, and the National Starch transaction. Quasi spin-offs, utilizing tracking stock, recapitalization, and the impact of the Clinton administration proposals on these synthetic deals are also discussed.

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Reconciling spin-offs with General Utilities repeal

Article Abstract:

The General Utilities doctrine repeal has not eliminated the tax protections available during corporate subsidiary spin-offs, split-offs, or other divisive reorganizations. Businesses continue to find ways to avoid corporate-level taxation in these restructurings. A variety of spin-off scenarios, tax-free reorganization techniques, and leveraging situations are discussed.

Analysis, General Utilities doctrine (Taxation)

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