Section 39 Scope of I.R.C. ? 355

• Library: Business Transitions 2009 Supp

The use of “cash-rich” split-offs was restricted, but not eliminated, by the Tax Increase Prevention and Reconciliation Act of 2005, Pub. L. No. 109-222, 120 Stat. 345, enacted May 17, 2006. Under these rules, see I.R.C. § 355(g), if either the distributing corporation or the controlled corporation has too much in the way of investment-type assets—cash, cash equivalent items, stock, securities, similar assets—(generally two-thirds or more of the fair market value of all of the corporation’s assets), in a...