General Requirements for a Tax-Free Spin-Off or Split-Off
Statutory and Judicial Requirements
In General
This chapter introduces the requirements for a nontaxable spin-off or split-off in general terms. Subsequent chapters will further analyze the section 355 requirements.
Section 355 contains several requirements intended to prevent possible abuses similar to what was attempted by Mrs. Gregory and other taxpayers. Some of the requirements are objective, and others require a judgment call after considering all the facts and circumstances evaluated in light of the purpose of the law.
According to section 355, the underlying regulations, and court decisions, the following requirements must be satisfied for the spin-off or split-off to ...
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