KPMG PPT - Tax Executives Institute, Inc.

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Background ► Section 332 - No gain or loss will be recognized on the receipt by a corporation of property distributed in complete liquidation of another corporation. ► Section 331 - Amounts received by a shareholder in a distribution in complete liquidation are treated as in full payment in exchange for the stock. ©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. 4
Section 267(f) – Background P P Unrelated Party 100% (Loss stock) 70% 30% S S ► P sells 30 percent of S stock (at a loss) to Unrelated Party. P recognizes and takes into account the loss on the sold stock. ► S liquidates. Section 331 applies to the liquidation (i.e., P recognizes and takes into account the loss on its remaining 70 percent of S stock). ► See Granite Trust Co. v. United States, 238 F.2d 670 (1 st Cir. 1956); Commissioner v. Day & Zimmerman, Inc. 151 F.2d 517 (3 rd Cir. 1945). ©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. 5
Page 1 and 2: Tax Executives Institute Corporate
Page 3: Built-in Loss on Subsidiary Stock
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 and 32: Unified Loss Rules Basis Redetermin
Page 33 and 34: Unified Loss Rules Basis Reduction
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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