Divisive Corporate Reorganizations: Threading the Eye of the I.R.C. § 355 Needle

In this episode of our podcast, A View from Meadows Collier, we are excited to share a special replay of the December 3, 2024 webinar titled, "Divisive Corporate Reorganizations: Threading the Eye of the I.R.C. § 355 Needle," featuring Firm Partner, Stephen A. Beck. In general, the distribution of appreciated assets from a corporation results in income tax liability to both the distributing corporation and the distributee shareholders. I.R.C. § 355, however, provides an exception through which a corporation can divide and distribute appreciated assets without triggering income tax liability to either the corporation or the shareholders. But qualifying under I.R.C. § 355 can be very difficult – like threading the eye of a needle. Mr. Beck discusses the many requirements that must be satisfied under I.R.C. § 355 to support deferral of taxable gain recognition, as well as potential pitfalls that could cause a divisive transaction to result in double taxation to the corporation and shareholder.