Nonliquidating distribution of

Assignment of Income Doctrine and the Tax Benefit Rule 2. Assignment of Income, Reserve for Bad Debts, Recapture, and Installment Obligations 1. Finally, the Portfolio reviews the issues arising from the liquidation of insolvent subsidiaries and the existence of intercorporate debt in subsidiary liquidations. Section 337 - Tax Consequences to Subsidiary (1) Subsidiary Not Taxable on Distributions to Parent with Respect to Stock (2) Subsidiary Not Taxable on Transfers in Satisfaction of Debt to Parent (3) Subsidiary Taxable on Certain Distributions to a Tax-Exempt Parent c. Basic Requirements of Nontaxable Subsidiary Liquidations A.

Miscellaneous Considerations in a Subsidiary Liquidation A. Section 384: Limitations on Use of Built-In Gains of Acquired Subsidiary 6.

The Portfolio identifies issues arising in the context of deemed liquidations, and the special problems that can occur as a result of the interplay of the liquidation provisions with the S corporation rules and the consolidated return regulations.

The Portfolio also discusses the relationship between the liquidation rules and §338 (the election to treat a stock purchase as a purchase of assets).

Requirement of Distribution with Respect to Stock 2. Tax Consequences to Insolvent Subsidiary on Cancellation of Debt in Liquidation 4. Section 332 Does Not Protect Parent from Gain or Loss b. Consequences of Subsidiary's Ownership of Parent Debt if § 332 Does Not Apply a.

Noncompliance with Regulatory Procedural Requirements d. Delay of Liquidating Distributions Beyond Three Years e. Tax Treatment of Intercorporate Debt in a Liquidation of a Subsidiary A. Consequences to Parent of Repayment from Subsidiary a. Distributions to Minority Shareholders and to Tax-Exempt 80% Distributees A.

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