The IRS on Monday, Sept. 29, withdrew two sets of proposed regulations issued in January, one for certain corporate spinoff transactions and another that would have required multiyear tax reporting for such transactions.
The first set of proposed regulations fell under Sections 355, 357, 361, and 368, which addressed certain matters relating to corporate separations, incorporations, and reorganizations that qualify, in whole or in part, for nonrecognition of gain or loss.
The second set of proposed regulations would require multiyear tax reporting for corporate separations and related transactions to establish the taxpayer’s position that the corporate separation and related transactions qualify for nonrecognition treatment under Subchapter C of the Internal Revenue Code.
The IRS said it withdrew the proposed regulations, which would have affected corporations and their shareholders and security holders, in response to several comments it received that were generally critical of the proposed guidance. Read more.