80% of the purchase of C stock could be treated as the purchase of control, leaving the remaining 20% as hot stock;
All of the C stock could be treated as hot stock; or
1, 1994, D transferred the operating assets and liabilities of the transportation division to C for stock followed immediately by a pro rata distribution of the C stock
to the D shareholders.
Consequently, no gain will be recognized to D on its distribution of C stock
to A in exchange for his D stock (Sec.
Second, D would be treated as distributing its remaining C stock to its shareholders.
Even though the distribution of C stock is part of a plan in which the ownership of the group has changed, D is not required to recognize gain under section 355(e), because D, C, and P will remain members of an affiliated group immediately after the completion of the plan.
With the intent and expectation of increasing the aggregate trading price of the common stock representing B1 and B2, D transferred all of the subsidiaries engaged in B2 to C, and distributed all of the C stock pro rata to its shareholders in a transaction that qualified for tax-free treatment under Sec.
Based on that advice, D distributed all of the C stock to its shareholders on a pro-rata basis.
After the contribution, D distributes the C stock
One issue that the Service addressed was whether the partnership had to recognize gain on the transfer of the B and C stock to its employees when they exercised the options and SARs.
80-76 to conclude that the partnership would not recognize gain or loss as a result of the transfer of the B and C stock to its employees on the exercise of the options or SARs.
1202 only applies to C stock
, it is a factor in deciding between C or S status.