C12-Chp-07-7-Rev-Rul- 2003-110-Corporate Divisions

C12-Chp-07-7-Rev-Rul- 2003-110-Corporate Divisions - Page 1...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
eaefb3a933ab39220daf3fbc7122ef5fc35b0512.doc Page 1 of 2 REV-RUL, 2003FED ¶46,841 Corporate divisions: Business purpose: Competitive position strengthened: Corporate or shareholder purpose: Tax avoidance motive absent. --, Rev. Rul. 2003-110 I.R.B. 2003-46 (October 23, 2003) [ Code Sec. 355 ] Corporate divisions: Business purpose: Competitive position strengthened: Corporate or shareholder purpose: Tax avoidance motive absent. -- The IRS has ruled that, in determining whether a publicly traded corporation's distribution of the stock of a controlled corporation satisfies the business purpose requirement of Reg. §1.355-2(b) that the distribution be motivated, in whole or substantial part, by one or more corporate business purposes, the fact that Code Sec. 355 permits a distributing corporation to distribute the stock of a controlled corporation without recognition of gain does not present a potential for avoidance of federal taxes under Reg. §1.355-2(b) . ISSUE In determining whether a distribution of the stock of a controlled corporation satisfies the business purpose requirement of §1.355-2(b) of the Income Tax Regulations that the distri- bution be motivated, in whole or substantial part, by one or more corporate business pur- poses, does the fact that §355 of the Internal Revenue Code permits a distributing corporation to distribute the stock of a controlled corporation without recognition of gain present a potential for the avoidance of Federal taxes under §1.355-2(b) ? FACTS Distributing is a publicly traded corporation that conducts a pesticides business. Controlled, a wholly owned subsidiary of Distributing, conducts a baby foods business. The pesticides business formulates, manufactures, and markets pesticides for agricultural use. The baby foods business processes and markets baby foods.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern