Overview
Jay Singer said that IRS officials’ comments on whether certain spinoff deals qualify as tax-free under tax code Section 355 do not address another issue that can arise: internal spinoffs that are commonly known as “drop, spin, liquidate” transactions. Mr. Singer suggested that taxpayers “think very hard about going in for a drop-spin-liquidate. It appears that there’s a strong likelihood that you will have to wait a very long time to get that ruling” on this issue.