Discussion:Spin-offs
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Discussion Forum Index --> Tax Questions --> Spin-offs
| 12 October 2006 | |
| Can a c-corp which holds appreciated real estate do a 355 spin-off of the real estate? I.e., form newco and contribute real estate to newco in exchange for stock of newco and then distribute stock of newco to c-corp shareholders. Among other things, it seem that newco, holding real estate would not meet the active trade or business requirement. Is this a viable, tax-efficient way to get appreciated real estate out of a c-corp? | |
| 12 October 2006 | |
| I think you answered your own question. Real estate, by itself, is not an active trade or business. | |
Mtmckeecpa (talk|edits) said: | 13 October 2006 |
| Riley,
What if the RE is commercial with significant services attached...remembering the rather long discussion on IRC 179 for commerical property? | |
| 14 October 2006 | |
| That is what I am trying to get at, is there ever a way holding real estate can be active trade or business. | |
| 14 October 2006 | |
| The answer is -- sometimes. Significant services is mentioned in the 355 regs. See Rev. Rul. 2002-49 or an excellent analysis of this issue. | |
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