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Tax Aspects of Corporate Division
book

Tax Aspects of Corporate Division

by Professor W. Eugene Seago
February 2021
Intermediate to advanced content levelIntermediate to advanced
156 pages
3h 37m
English
Business Expert Press
Content preview from Tax Aspects of Corporate Division

CHAPTER 4

Not Used Principally as a Device for Distributing Earnings and Profits

Introduction

In General

The previous chapter examined the corporation’s required business purpose for the distribution to achieve section 355 benefits. This chapter looks at the factors that are considered in determining whether the distribution was made for a nonbusiness purpose; that is, “a device for the distribution of the earnings and profits of the distributing or controlled corporation.”1 The regulations elaborate on the concept of “device” without actually defining the term.

Section 355 recognizes that a tax-free distribution of the stock of a controlled corporation presents a potential for tax avoidance by facilitating the avoidance of the dividend provisions ...

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Publisher Resources

ISBN: 9781953349415