Letter Ruling 9720007 - the "risky business" business purpose and a bit more
Article Abstract:
The so-called "risky business" business purpose is the subject of IRS Letter Ruling 9720007. The IRS considers factors such as insurace issues and the risky nature of the business involved in order to evaluate the taxability of certain corporate distribution transactions. This letter ruling itself concerns a distributing S corporation's bootstrap acquisition of another corporation whose business is marked by higher liability risks. The IRS also evaluates the viability of an alternative nontax transaction in ruling in these cases.
Publication Name: Journal of Corporate Taxation
Subject: Law
ISSN: 0094-0593
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
Mysterious revocation under Section 304
Article Abstract:
The IRS in Letter Ruling 9347004 revoked Letter Ruling 8710035 without explaining the reason, except that it was related to an error in applying section 304. The action leaves the status of the law under Section 304 uncertain. The letter ruling dealt with a case in which a new company was formed by two subsidiaries of a single parent. The transactions included a section 351 transfer and a sale by one subsidiary to the other of all but one share of stock in the new company, which was regarded as a dividend under section 304.
Publication Name: Journal of Corporate Taxation
Subject: Law
ISSN: 0094-0593
Year: 1995
User Contributions:
Comment about this article or add new information about this topic:
Stalking the elusive qualified stock purchase
Article Abstract:
Corporate acquisitions, and the difference between such acquisitions and "qualified stock purchases", are the focus of a 1997 IRS Technical Advice Memorandum. If a transaction is determined to be a qualified stock purchase, the asset purchase election is available to provide step-up basis. The three elements required to consider an acquisition to be a qualified stock purchase are discussed.
Publication Name: Journal of Corporate Taxation
Subject: Law
ISSN: 0094-0593
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Stealth split dollar. The family business sale: it's more than tax planning. Success begins with "M." (insurance underwriting)
- Abstracts: Working together: leaders pledge 105th Congress will pursue a bipartisan course. Whoa! ABA seeks delay in amending federal discovery rules
- Abstracts: BIDs fare well: the democratic accountability of business improvement districts. National League of Cities rising: how the Telecommunications Act of 1996 could expand Tenth Amendment jurisprudence
- Abstracts: Graduating with tech honors. Connecticut pushes digital deeds. Inside education
- Abstracts: Lawyers buck downsizing trend; executive branch workforce being reduced as attorneys are added. Collection next step for Marcos victims