Bank holding company/bank combinations

Article Abstract:

IRS Private Letter Ruling 9240026 clarified policy on the acquisition of banks and bank holding companies by other banks and bank holding companies. The IRS declared that it would regard the holding companies' merger as taking place first and that the target bank was therefore already part of the acquiring bank's group even before the target and acquiring banks merged. This decision also shows that the IRS's policy of not ruling on mergers involving bank holding companies can be avoided.

Laws, regulations and rules, Mergers, acquisitions and divestments, Bank mergers, Bank holding companies

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Tracking stock ruling

Article Abstract:

The IRS ruled that tracking stock is considered stock in the parent corporation and allowed recapitalization of this stock without income recognition. Tracking stock is stock of a parent corporation that tracks the performance of a subsidiary. Earnings and appreciation may follow the subsidiary, but there are not the voting and liquidation rights that would make the stock stock in the subsidiary. The IRS has classified this subject matter as a no-rule area.

Subsidiary corporations, Subsidiaries, Securities, Stock transfer

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New section 351(e): the "not an investment company" representation for section 351 private letter ruling requests just got tougher

Article Abstract:

The Taxpayer Relief Act's amendment of IRC s. 351(e) means that the usual representations made in requesting private letter rulings, which typically state that transferees are not investment companies, could in fact lead to unexpected tax consequences. Transactions previously considered tax-free exchanges might be considered investment company transfer under the revised law.

United States, Investment companies

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