KPMG PPT - Tax Executives Institute, Inc.

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Proposed CERT Rules General CERT rules ► ► ► ► Identification of CERT costs for CERIL computation ► ► MSAs: ► FMV of acquired stock and boot ► Amounts paid to acquire stock including capitalized and disallowed amounts EDs: ► FMV of distribution ► Amounts paid to acquire stock including capitalized and disallowed amounts ► Proportionate allocation of costs Tax-free transactions ► Transaction must be tested for CERT status regardless of gain or loss recognition Interaction of EDs and MSAs ► ► ► MSAs trump EDs If part of integrated plan, a distribution will be treated as part of MSA rather than as an ED If not an MSA, test as an ED Limited prior history ► ► LLY short year rule – prior years are prorated Short lookback period – Zero is deemed interest incurred in prior years ► Successor rule – Section 381 ©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. 50
Proposed CERT Rules Consolidated CERT rules – Treas. Reg. §1.1502-72 ► Guidance on single vs. separate entity ► ► ► ► Strong single entity flavor Location of CERT and interest do not matter Intercompany transactions are disregarded unless party to transaction leaves group No separate tracking of CERT ► SRLY CERT of Target infects group ► Reverse acquisition rule ► Allocation of CERT “attributes” ► ► ► Interest history CERT costs Limited CERT status ► Life-Nonlife application ©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. 51
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 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: Proposed CERT Rules On September 13

KPMG PPT - Tax Executives Institute, Inc.

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