Corporate Separations Are Inevitable; The Complex Rules of Doing Them Tax Free

This presentation covers the most significant tax rules that planners and clients should be aware of in making sure that a corporate separation will qualify as a tax-free event. Corporate separations typically occur when:

• Shareholders no longer agree on the direction of the corporation,
• Family business succession planning issues arise,
• Shareholders want to insulate different corporate divisions from the liabilities of other divisions,
• A corporation wants to give certain key employees an equity interest in a certain corporate division or
• A corporation wants to consolidate certain assets that are expected to sell in the future for a higher price.
• Failure to understand and carefully comply with the detailed tax rules to qualify as a tax-free corporate divisive reorganization will result in the entire business being treated as if it were sold.