Rev. Rul. 63-260: Failed spin due to transitory control

In Rev. Rul. 99-6, the IRS provides that certain transfers of partnership interests cause termination of a partnership.

Rev. Rul. 63-260: Failed spin due to transitory control

In Rev. Rul. 99-6, the IRS provides that certain transfers of partnership interests cause termination of a partnership.

Citations: Rev. Rul. 63-260; 1963-2 C.B. 147

Distinguished by Rev. Rul. 69-407

Rev. Rul. 63-260

A owned all of the stock of X which owned 70 shares of the stock of Y. A also owned the remaining 30 shares of Y stock directly. A contributed 10 shares of his Y stock to X . Immediately thereafter, X distributed all 80 shares of Y stock now held by it to A .

Held , the distribution by X does not qualify as a nontaxable distribution under the provisions of section 355 of the Internal Revenue Code of 1954, because X did not have `control' of Y within the meaning of section 368(c) of the Code immediately before the distribution except in a transitory and illusory sense.

Section 355 of the Code cannot be made to apply to a transaction in which an immediately preceding contribution to capital by the distributor corporation's shareholder is made solely to attempt to qualify the transaction as a nontaxable distribution under that section.

‍

Product heading

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.

Get Started

Related Diagrams

10 Min Read

Rev. Rul. 70-224: Cause to be directed; § 368(a)(2)(C)

Rev. Rul. 70-224: It is held that the transaction in the instant case is an acquisition by X, solely in exchange for its voting stock and the assumption of Z's liabilities, of substantially all of the properties of Z, and is, therefore, a reorganization within the meaning of section 368(a)(1)(C) and section 368(a)(2)(C) of the Code. The fact that all the assets of Z were transferred directly to Y rather than through X to Y does not affect the reorganization.

Explore Diagrams
10 Min Read

Rev. Rul. 82-150: Deep-in-the-money options

In Rev. Rul. 82-150, the IRS holds that a sale of a deep-in-the-money option was, in substance, not an option but a completed sale of the referenced stock for purposes of the foreign personal holding company rules.

Explore Diagrams
10 Min Read

Rev. Rul. 2001-46, Sit. 2: Acquisition merger & upstream merger collapsed

Rev. Rul. 2001-46, Sit. 2: Under the facts presented, if, pursuant to an integrated plan, a newly formed wholly owned subsidiary of an acquiring corporation merges into a target corporation, followed by the merger of the target corporation into the acquiring corporation, the transaction is treated as a single statutory merger of the target corporation into the acquiring corporation that qualifies as a reorganization under section 368(a)(1)(A).

Explore Diagrams