Understand the requirements of a tax-free spin-off and common pitfalls in tax-free spin-off structuring.
A spin-off of assets or stock by a corporation can incur significant corporate and stockholder-level tax if not properly structured. There are numerous and often esoteric requirements for a spin-off to qualify as a tax-free transaction for U.S. federal income tax purposes. This presentation will help tax advisors and in-house tax practitioners understand the reasons when to pursue a tax-free spin-off, the requirements of a tax-free spin-off and common pitfalls in tax-free spinoff structuring. This workshop will also discuss areas under current IRS study, recent revisions to the IRS private letter ruling policy, and alternative structures if a tax-free spin-off is not available. Finally, this discussion will discuss issues specifically impacting technology and life science companies.
Learning Objectives
- You will be able to describe the fundamental requirements of a tax-free spinoff.
- You will be able to discuss the tax considerations whether to pursue a tax-free spinoff or an alternative transaction.
- You will be able to explain when a tax-free spinoff makes sense.
- You will be able to understand recent changes to IRS private letter ruling policy.
Agenda
When Does a Tax-Free Spinoff Make Sense?
- Costs Versus Value
- Operational Restrictions
- Availability for Technology Companies
Basic Requirements and Structures
- Statutory and Regulatory Requirements
- Core Documents
- Spin-off Structures
IRS Study and Rulings
- Recent IRS Guidance and Regulations
- Revisions to Private Letter Ruling Request Requirements and Ruling Policy
Alternatives
- Tracking Stock
- 336(E) Elections
Speakers
Myra Sutanto Shen,
Wilson Sonsini Goodrich & RosatiPartner, Wilson Sonsini Goodrich & Rosati
U.S. federal income tax planning for a variety of corporate transactions, including corporate formations, financings and restructurings, equity offerings, and mergers and acquisitions
Select speaking engagements include: “Dealing with Losses: CARES Act Changes, Debt Restructuring and Other Strategies for a Strong Future,” panelist, High Tech Tax Institute, November 10, 2020; “The 2017 Tax Act’s Impact on Emerging Growth Enterprises and Start-Ups,” Practicing Law Institute, on-demand one-hour briefing, April 23, 2019; and "Qualified Small Business Stock Trends in Venture Financings and Mergers and Acquisitions," Practicing Law Institute, on-demand one-hour briefing, August 3, 2017
Articles include: co-author, “USA” chapter, Corporate Tax 2020, Eighth Edition, Global Legal Insights, 2020; co-author, “USA” chapter, Corporate Tax 2019, Seventh Edition, Global Legal Insights, 2019; co-author with D. Glazer, "The UK Startup's Guide to Navigating the U.S. Tax Implications of U.S. VC Investment," Notion Capital Insights, December 13, 2017; and "The Other Holding Period: Qualified Small Business Stock and the Magic of Five Years," M&A Tax Report, November 2016
Member, International Fiscal Association, American Bar Association
J.D. degree, Northwestern University School of Law; B.A. degree in integrated science and biology, Northwestern University
Can be contacted at 650-565-3815 or msutantoshen@wsgr.com
Timothy Shapiro,
Cooley LLP- Partner at Cooley LLP in Palo Alto, CA.
- Practice focuses on U.S. federal income tax advice for public and private companies on domestic and cross-border transactional matters, including mergers and acquisitions, reorganizations, debt and equity financings, and the formation and operation of limited liability companies and other pass-through entities.
- Presents at conferences and webinars on topics related to corporate taxation and startup taxes
- Member, American Bar Association
- Previous law clerk to the Hon. Richard A. Posner of the U.S. Court of Appeals for the Seventh Circuit
- J.D. degree, Stanford Law School; B.A. degree in economics and music, Amherst College
Who Should Attend
This live webinar is designed for accountants, CPAs, CFOs, controllers, finance directors, tax managers, tax preparers, presidents, vice presidents, bookkeepers, enrolled agents and attorneys.
