Ch 7 Part 4

Question 0

Split up

Answer 0

Distributing corp transfers all it’s assets to 2 controlled corps
In exchange for controlled corp stock and other securities

Distributing corp then distributes stock in 2 controlled corps
To all its shareholders in exchange for all its outstanding stock

Question 1

Spin off

Answer 1

Distributing corporation transfers some of its assets to controlled
corp in exchange for stock and other securities

Distributing corp then distributes controlled corp. stock ratably
To all its shareholder who don’t surrender their distributing corp
Stock

Question 2

If section 355 requirements are met, how is a spinoff taxed

Answer 2

Taxed as dividend to shareholders

Question 3

If section 355 requirements are met, how is a split off taxed?

Answer 3

Taxed as stock redemption to shareholders

Question 4

If section 355 requirements are met, how is a split up taxed?

Answer 4

Taxed to its shareholders like a liquidating of distributing corporation

Question 5

Divisive Type D reorganization: asset transfer

Answer 5

Same treatment as sec. 351 carryover basis and holding period

No gain or loss recognized unless boot received

Question 6

When shareholder receives boot in spinoff how is it treated?

Answer 6

FMV of boot is treated as dividend to extent shareholders

Ratably share distributing corp’s E&P

Question 7

Receipt of boot in split off or split up 3 things

Answer 7

Can’t recognize loss

Gain recognized to extent of lesser of realized gain or FMV of
Boot received

Gain treated as dividend if shareholders ratably share E&P
otherwise treated as capital gain