KPMG PPT - Tax Executives Institute, Inc.

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Unified Loss Rules Basis Redetermination Rule Issues arising in connection with the basis redetermination rule: ► ► ► ► ► ► Additional pressure on maintaining basis records; Information needed on a block-by-block, year-by-year basis; For each actually issued block of shares or deemed issued block of shares (e.g., shares deemed issued as a result of an intragroup reorganization); If taxpayer acquired another consolidated group, the taxpayer needs to know basis information for subsidiary members of that other group; Consider impact of any intercompany debt recharacterized as equity; this could create another block and/or class of stock to trace; Potential need for valuation analysis. ©2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 32
Unified Loss Rules Basis Reduction Rule ► Intended to eliminate stock loss that is presumed noneconomic; ► Only applies if, after the application of the basis redetermination rule, the transferred share is still a loss share; ► Does not reduce the basis of a transferred share below value. ©2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 33
Page 1 and 2: Tax Executives Institute Corporate
Page 3 and 4: Built-in Loss on Subsidiary Stock
Page 5 and 6: Section 267(f) - Background P P Unr
Page 7 and 8: Intercompany Sale of Stock at a Los
Page 9 and 10: Section 267(f) - Final Regulations
Page 11 and 12: Section 267(f) - Final Regulations
Page 13 and 14: Worthless Stock Loss Requirements f
Page 15 and 16: PLR 201149015 HC2 HC1 S1 S2 S3 HC2
Page 17 and 18: PLR 201149015 HC2 HC1 S1 S2 S3 HC2
Page 19 and 20: GLAM 2012-006 Situation 1 P $10 deb
Page 21 and 22: GLAM 2012-006 Situation 3 P $10 deb
Page 23 and 24: GLAM 2012-003 M Year 1 Year 2 Year
Page 25 and 26: Unified Loss Rules © 2011 KPMG LLP
Page 27 and 28: Unified Loss Rules $100 P S FMV $10
Page 29 and 30: Unified Loss Rules ► Basis redete
Page 31: Unified Loss Rules Basis Redetermin
Page 35 and 36: Unified Loss Rules Basis Reduction
Page 37 and 38: Unified Loss Rules Attribute Reduct
Page 43 and 44: CERT Rules If an “applicable corp
Page 45 and 46: Applicable Corporations ► An acqu
Page 47 and 48: Corporate Equity Reduction Interest
Page 49 and 50: Proposed CERT Rules On September 13
Page 51 and 52: Proposed CERT Rules Consolidated CE

KPMG PPT - Tax Executives Institute, Inc.

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