Type D divisive reorganizations can take the form of a split-up, a split-off, or a spinoff, whereby a corporation transfers part of its assets to one or more controlled corporations, which then distribute their stock in one of the following ways:
* In a split-up, assets are transferred from one corporation to two or more controlled corporations.
A split-up can be used in a variety of circumstances, including separating groups of shareholders whose disagreements on how a business should be run could have a detrimental impact on the business.
The most high-profile split-ups
involved Foreign Secretary Robin Cook who ditched wife Margaret after 28 years when he had an affair with secretary Gaynor Regan, whom he later married.
The percentage split-ups
of the segments categorized under the market have been used to arrive at the market sizes of each of the individual segments.
When it comes to self-assessment, Rob remains obsessed with list-making, to the point of compiling an all-time Top Five Most Memorable Split-Ups
. This cues a series of flashbacks as Rob recalls, among others, a dazzling college co-ed (Catherine Zeta-Jones) who unceremoniously dumped him for someone more exciting, and a broken-hearted manic-depressive (Lili Taylor) who did the same.
With the increasing incidence of spin-offs, split-ups, dropdowns and other reorganizations, corporations frequently face the issue of which entity is entitled to a deduction for equity-based or deferred compensation granted before the transaction but paid or vested after the transaction.
The same may be true of split-ups in which the new company remains within the controlled group (e.g., a drop-down of a subsidiary).
These rulings address reorganizations that appear to involve spin-offs of existing subsidiaries as well as split-ups. Rather than requiring the reorganizing entities strictly to apply Sec.
368(a)(1)(D), involve transfers to controlled corporations that may be either divisive (spin-offs, split-offs or split-ups
) or nondivisive.
The Secretary shall prescribe such regulations as may be appropriate to carry out the purposes of this section, including regulations to prevent the avoidance of the purposes of this section through split-ups
, shell corporations, partnerships, or otherwise.
or split-offs (as opposed to spin-offs), it may be possible to step up the basis of a controlled corporation's assets with only one level of tax.